You will use the following information to answer three questions.

A local group of students is looking for investors for a new company that will develop mobile apps for the healthcare industry. The company requires $20 million in start-up funds. It can be capitalized with 100% equity financing or with 40 percent debt and 60 percent equity. EBIT is $750,000 and the company will pay taxes at a rate of 30 percent. Debt financing would bear an interest rate of 8 percent.

Answer the following questions based upon the firm using 40% debt and 60% equity financing.

What would be the firm's net income? Use the format X,XXX,XXX.XX.

What would be the total dollar return to investors? Use the format X,XXX,XXX.XX.

What would be the total ROE? Use the format XX.X%.