Question 12 2.5 points Save Answer Exhibit 16.1 Zorn Corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. The firm's annual sales are expected to total $3,600,000 its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 40%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 22 Refer to Exhibit 16.1. Assume now that the company believes that it it adopts a restricted policy, its sales will fall by 15% and EBIT will fall by 10%, but its total assets turnover, debt ratio, interest rate and tax rate will all remain the same. In this situation what's the difference between the projected ROEs under the restricted and relaxed policies? O A 2 24% B.2.46% OC.270% O 0.2.98% O E 3.27%