Pinkerton Packaging's ROE last year was 4.5 percent, but its management has developed a new operating plan designed to improve things. The new plan calls for a total debt ratio of 50 percent, which will result in interest charges of $240 per year. Management projects an EBIT of $800 on sales of $8,000, and it expects to have a total assets turnover ratio of 1.6. Under these conditions, the federal-plus-state tax rate will be 40 percent. If the changes are made, what return on equity will Pinkerton earn?

A. a. 2.50%

B. b. 13.44%

C. c. 13.00%

D. d. 14.02%

E. e. 14.57%