Question: Case 2 Case 1 $ 1000 $ 200 $ 1000 $ 600 Project cost a) Debt b) Equity c) Revenue from project d) Interest rate

Case 2 Case 1 $ 1000 $ 200 $ 1000 $ 600 Project cost a) Debt b) Equity c) Revenue from project d) Interest rate on debt $ 800 $ 400 $ 200 $ 200 5% 7% Question 4 The return on equity when using the case of high leverage will be less than the return on equity when using low leverage to finance project cost. Select one: True

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