Myrtle Propane is considering a project that will require $700,000 in assets. Determine the ROE if the project is financed with 100% equity and if they decide to finance it with 50% equity and 50% debt (cost of debt is 10%). The firm has a tax rate of 30% and the project is expected to produce and EBIT of -$60,000.

a) -4.8%; -17.1% b) -6.3%; -21.9% c) -5.1%; -20.0% d) -6.0%; -19.0%