Lilia Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately $2 million as a result of an asset expansion presently being undertaken. Fixed assets total $1.2 million, and the firm plans to maintain a 70% debt-to-assets ratio. Lilias interest rate is currently 10% on both short- and long-term debt (which the firm uses in its permanent structure). Three alternatives regarding the projected current assets level are under consideration: (1) a restricted policy where current assets would be only 45% of projected sales, (2) a moderate policy where current assets would be 50% of sales, and (3) a relaxed policy where current assets would be 60% of sales. Earnings before interest and taxes should be 12% of total sales, and the federal-plus-state tax rate is 35%.

What is the expected return on equity under each current assets level?

Round your answer to 2 decimal places. Do not round intermediate calculations. It will save you time and unnecessary errors to use Excel in completing this problem.

The ROE under the restricted policy is equal to ____%.

The ROE under the moderate policy is equal to _____%.

The ROE under the relaxed policy is equal to _____%.