Question: ABC Inc. is evaluating a project that will require $600,000 in assets. The project is financed with equity only and is expected to generate earnings

ABC Inc. is evaluating a project that will require $600,000 in assets. The project is financed with equity only and is expected to generate earnings before interest and taxes of $100,000. The firm has a tax rate of 20%. What is the ROE (return on equity) for this project?

17.08%

13.33%

3.96%

20.00%

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