PLEASE HELP!! I WILL LIKE ANSWER!! The following structure of interest rates is given:

Term of Loan

1 year

2 year

5 year

Interest Rate

3%

4%

6%

8%

10 year

Your firm needs $2,300 to finance its assets. Three possible combinations of sources of finance are listed below:

(1)

Assets $2,300 Liabilities

(2)

$0

Assets

$2,300 Liabilities

$720

(a one-year loan)

Equity

$1,580

Equity

$2,300

(3)

Assets

$2,300 Liabilities

$720

(a 10-year loan)

Equity

$1,580

a. The firm expects to generate revenues of $2,600 and have operating expenses of $2,370. If the firm's tax rate is 40 percent, what is the return on equity under each choice? Round your answers to two decimal places.

Choice 1:

%

Choice 2:

%

Choice 3:

%

b. During the second year, sales decline to $2,400 while operating expenses decline to $2,140. The structure of interest rates becomes:

Term of Loan

Interest Rate

1 year

5%

2 year

7%

5 year

9%

10 year

11%

Given the three choices in the previous year, what is the return on equity for the firm during the second year? Round your answers to two decimal places.

Choice 1:

%

Choice 2:

%

Choice 3:

%

c. What is the implication of using short-term instead of long-term debt during the two years?

The increased use of short-term debt instead of long-term debt resulted in the -Select in the return on the equity.

The following structure of interest rates is given: Your firm needs $2,300 to finance its assets. Three possible combinations of sources of finance are listed below: (a 10-year loan) Equity $1,580 a. The firm expects to generate revenues of $2,600 and have operating expenses of $2,370. If the firm's tax rate is 40 percent, what is the return on equity under each choice? Round your answers to two decimal places. b. During the second year, sales dedine to $2,400 while operating expenses dedine to $2,140. The structure of interest rates becomes: b. During the second year, sales decline to $2,400 while operating expenses decline to $2,140. The structure of interest rates becomes: Given the three choices in the previous year, what is the return on equity for the firm during the second year? Round your answers to two decimal places: Choice 1: % Choice 2: % Choice 3: % c. What is the implication of using short-term instead of long-term debt during the two years? The increased use of short-term debt instead of lono-term debt resulted in the In the return on the equity