Chapter 12, Bonus Question 8 Project Payment or Net Operating Cost Return Income 200000 01000 Debt 50% Interestpayment 8.00_ 00000 00% m 000000 00000 Debt 60% Interest payment 8.00_ 00000 00% m 200000 0000 Debt 70% Interestpayment 8.00_ 0:000 00% m 200000 01,000 Debt 80% _ Interest payment 8.00% 00000 20% m Total 100% 250, 000 24. 60% 61 500 a. What would be Peggy's rate of return on her own investment if she borrowed 50% of the mone' lot's purchase and paving? What would be her debt coverage ratio? Answer: b. What would be Peggy's rate of return on her own investment if she borrowed 60% of the mone lot's purchase and paving? What would be her debt coverage ratio? Answer: (2. What would be Peggy's rate of return on her own investment if she borrowed 70% of the mone' lot's purchase and paving? What would be her debt coverage ratio? Answer: d. What would be Peggy's rate of return on her own investment if she borrowed 80% of the mone lot's purchase and paving? What would be her debt coverage ratio? Answer: e. List two potential disadvantages (to Peggy] of employing a highly leveraged strategy when maki