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Green Foods currently has $550,000 of equity and is planning an $220,000 expansion to meet increasing demand for its product. The company currently earns $110.000

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Green Foods currently has $550,000 of equity and is planning an $220,000 expansion to meet increasing demand for its product. The company currently earns $110.000 in net income, and the expansion will yleld $55,000 in odditional income before any interest expense. The company has three options. (1) do not expand, (2) expand and issue $220,000 in debt that requires payments of 13% annual interest, or (3) expand and raise $220,000 from equity financing. For each option. compute ( a ) net income and (b) retum on equity (Net Income-Equity). Ignore ariy income tax effects Note: Round "Return on equity" to 1 decimal place

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