Business, 24.04.2020 22:00, cbawesome8

Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales are expected to total $3,600,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 25%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2.Refer to the data for Hardwig, Inc. What's the difference in the projected ROEs under the restricted and relaxed policies?a. 1.88%b. 1.50%c. 3.24%d. 2.70%e. 2.25%

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Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment polic...