Rent Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately 53 million as a result of an asset expansion presently being undertaken. Find assets total $1 million, and the firm plans to maintain a 60% debt-to-assets ratio, antes interest rate is currendy 10% on both short term and long-term debt (which the firm uses in its permanent structure). Three alternatives regarding the projected current assets level are under consideration (1) a restricted policy where current assets would be only 45% of projected sales, (2) a moderate policy were current assets would be some of sales, and (3) a relaxed policy where current assets would be 60% of sales, Earnings before interest and taxes should be 14% of total sales and the federal-plus-state tax rate is 40% a. What is the expected return on equity under each current assets level Round your answers to two decimal praces Restricted policy Moderate policy Relaxed policy D. In this problem, we assume that expected sales are independen of the current set mestment policy. Its a valid assumption! 1. Yes, the current asset policies followed by the mainly influence the level of long-term debt used by the tim 11. Yes, the current asset polis fofowed by the form mainly influence the level of fixed assets III. No, this sumtion would probably not be valida real worldstution. Afi's current asset Dicies may have a signincant effect on IV. Yes, this sumption would probably be vaid in a world situation. Afirm's current se policies have giant afect on sale V. Yes, sales are controlled only by the degree of marketing effort the respective of the current se policit malos How would the firm's Hected by the tento The input the below who bend, may be reviewed and need by your structor