PT. Segar; an exporter of vegetable products. Followings are financial figures as of 2020 (all in USD 000); sales reached USD 2.600. COGS and Operational variable cost have been estimated as 72% and 15% of Sales respectively. Operational fixed cost was USD 120, and depreciation was USD 80 Million. The company has USD 400 Million Bank loan with 10% interest and an Equity of USD 700, and total Assets USD 1.600 Corporate tax is 30% of EBIT.

a. Calculate the required ROE

b. Calculate the necessary sales (USD Million) for required ROE to be achieved! What is it in terms of growth?

c. Do you think this Sales Growth target is reasonable? Explain!

d. Suppose in addition relying on sales growth; you also try to improve efficiency. Setting the sales growth at 15%; how much Operational Variable Cost (% sales) should be reduced to achieve the target?

e. Compare your option at point a versus c? Which one do you prefer? Explain!