Th 25: End-of-Chapter Problems - Management of Current Assets Your firm needs $2,300 to finance its assets. Three possible combinations of sources of finance are listed below: a. The firm expects to generate revenues of $2,700 and have operating expenses of $2,420. If the firm's tax rate is 40 percent, what is the return on equity under each choice? Round your answers to two decimal places. Choice 1: % Choice 2: % Choice 3: % b. During the second year, sales decline to $2,350 while operating expenses decline to $2,100. The structure of interest rates becomes: Given the three choices in the previous year, what is the return on equity for the firm during the second year? Round your answers to two decimal places. Choice 1: % Choice 2: % Choice 3: % c. What is the implication of using short-term instead of long-term debt during the two years? The increased use of short-term debt instead of long-term debt resulted in the in the retum on the equity