Question: ABC Inc. is evaluating a project that will require $500,000 in assets. The project is financed with 50% debt and 50% equity and is expected

ABC Inc. is evaluating a project that will require $500,000 in assets. The project is financed with 50% debt and 50% equity and is expected to generate earnings before interest and taxes of $90,000. The firm has a tax rate of 16% and pays 4% interest on the debt. What is the ROE (return on equity) for this project? a. 26.88% b. 16.00% c. 18.75% d. 5.12%.

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