All 1 question:

First blank: decrease or increase

Second blank: decrease or increase

Third blank: decrease or increase

Fourth blank: higher or lower

Fifth blank: an aggressive or a conservative

leverage also increases the risk that shareholders bear. Consider the following case: Newtown Propane is a small company and is considering a project that will require $600,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 25%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $145,000? 18.13% 13.60% 10.88% 14.50% What will be the project's ROE if it produces an EBIT of $60,000 and it finances 50% of the project with equity and 50% with debt? When calculating the tax effects, assume that Newtown Propane as a whole will have a large, positive income this year