Big Retailer (BR) follows a moderate current asset investment policy, but is now considering a change, perhaps to a restricted or maybe to a relaxed policy.BR's annual sales are $1,400,000; its fixed assets are $950,000; its target capital structure calls for 40% debt and 60% equity; its EBIT is $600,000; the interest rate on debt is 8%; and its tax rate is 20%.With a restricted policy, current assets will be 20% of sales, while under a relaxed policy, current assets will be 35% of sales.What is thedifferencein the projected ROEs between the restricted and relaxed policies?

Just checking my answer of: 7.59%