1. The Ace Co. Ltd is trying to establish a current assets policy. It has fixed assets of

$600,000 and the firm plans to maintain a debt ratio of 50%. The interest rate on its debt

is 10%. Three alternative current asset policies are under review: 40% 50% and 60% of

projected sales. The firm expects to earn 15% before interest and taxes on sales of $3

million. Its tax rate is 40%. What is the expected ROE for each alternative