Reynolds Equipment Company is investigating the use of various combinations of short-term and long-term debt in financing its assets. Assume that the company has decided to employ $30 million in current assets, along with \$35 million in fixed assets, in its operations next year. Given this level of current assets, anticipated sales and EBIT for next year are $70 million and $7 million, respectively. The company's income tax rate is 40 percent. Stockholders' equity will be used to finance $44 million of its assets, with the remainder being financed by short-term and longterm debt. Reynolds is considering implementing one of the following financing policies: a. Determine the following for each of the financing policies: i. Expected rate of return on stockholders' equity. Round your answers to two decimal places. Expected rate of return on equity (Aggressive policy): % Expected rate of return on equity (Moderate policy): % Expected rate of return on equity (Conservative policy): % ii. Net working capital position. Enter your answers in millions. For example, an answer of $1 million should be entered as 1 , not 1,000,000. Round your answers to the nearest whole number. Net working capital (Aggressive policy): \$ Net working capital (Moderate policy): \$ Net working capital (Conservative policy): \$ million million million iii. Current ratio. Round your answers to two decimal places. Current ratio (Aggressive policy): Current ratio (Moderate policy): Current ratio (Conservative policy): b. Evaluate the profitability versus risk trade-offs of these three policies. Expected profitability (rate of return on equity) and risk (as measured by net working capital position or current ratio) are lowest under and highest under