Kimble Electronics is a small toy manufacturing company with total assets of $1.5 million. The company has the opportunity to do a leveraged recapitalization that would involve borrowing 30% to 50% of the firm's assets at a rate of 9%

per year. The firm's annual return on its total investment in assets varies from 3% to 10%.

Analyze the effects of financial leverage of the rate of return earned on Kimble's equity if the firm borrows 30% or 50% of its assets (i.e., complete the following table). You may ignore taxes in your calculations. Solve

the solution in box A. Round answer to the nearest two decimal places.

10% Return on Assets

30% debt to assets

? - Box A solution - answer is ?