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Sombra Corp. is a small company and is considering a project that will require $700,000 in assets. The project will be financed with 100% equity.

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Sombra Corp. is a small company and is considering a project that will require $700,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 25%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $155,000 ? 12.46% 16.61% 10.80% 18.27% Determine what the project's ROE will be if its EBIT is $45,000. When calculating the tax effects, assume that Sombra Corp, as a whole will have a large, positive income this year. 5.76% 4.08% 4.56% 4.8% Sombra Corp. is also considering financing the project with 50% equity and 50% debt. The interest rate on the company's debt will be 12%. What will be the project's ROE if it produces an EBIT of $155,000 ? 20.58% 18.16% 24.21% 26.63% What will be the project's ROE if it produces an EBIT of $45,000 and it finances 50% of the project with equity and 50% with debt? When calculating the tax effects, assume that Sombra Corp. as a whole will have a large, positive income this year. 18.64% 17.71% 20.50% 24.23%

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