Problem 3-10 Sharpe Razor Company has total assets of $2,500,000 and current assets of $1,000,000. It turns over its capital assets five times a year and has $700,000 of total debt. Its return on sales is 3 percent. What is Sharpe's return on shareholders equity? (Round the final answer to 1 decimal place.) 1% ROE Problem 6-18 Collins Systems Inc. is trying to develop an asset-financing plan. The firm has $300,000 in temporary current assets and $200,000 in permanent current assets. Collins also has $400,000 in capital assets. Assume a tax rate of 40 percent. a. Construct two alternative financing plans for Collins. One of the plans should be conservative, with 80 percent of assets financed by long-term sources, and the other should be aggressive, with only 30 percent of assets financed by long term sources. The current Interest rate is 15 percent on long-term funds and 10 percent on short-term financing Conservative Aggressive Total interest charge $ 126000 $ 103500 b. Given that Collin's earnings before interest and taxes are $180,000, calculate earnings after taxes for each of your alternatives. Earnings after Conservative Aggressive taxes $ 32400 $ 45900 c. What would happen if the short and long-term rates were reversed? Earnings after taxes Conservative Aggressive $