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

Term of Loan	Interest Rate
1 year	3%
2 year	5%
5 year	6%
10 year	8%

Your firm needs $2,000 to finance its assets. Three possible combinations of sources of finance are listed below:

(1)

Assets $2,000 Liabilities

Equity

$2,000

(2)

$0 Assets $2,000 Liabilities

$820

(a one-year loan)

Equity

$1,180

(3)

Assets $2,000 Liabilities

(a 10-year loan)

Equity

$820

$1,180

a. The firm expects to generate revenues of $2,550 and have operating expenses of $2,060. 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 $2,150 while operating expenses decline to $1,820. The structure of interest rates becomes:

Term of Loan	Interest Rate
1 year	5%
2 year	6%
5 year	7%
10 year	9%

Choice 1:	%
Choice 2: Choice 3:	% %

places.

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 $2,000 to finance its assets. Three possible combinations of sources of finance are listed below: (a10-yearloan)Equity$1,180 a. The firm expects to generate revenues of $2,550 and have operating expenses of $2,060. 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 decline to $2,150 while operating expenses dedine to $1,820. The structure of interest rateg becomes: b. During the second year, sales dedine to $2,150 while operating expenses decline to $1,820. 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 decim places. Choice 1: % Choice 2: 95 Cholce 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 In the return on the equity