Question: Determine what the projects ROE will be if its EBIT is $60,000. When calculating the tax effects, assume that Western Gas & Electric Co. as

Determine what the projects ROE will be if its EBIT is $60,000. When calculating the tax effects, assume that Western Gas & Electric Co. as a whole will have a large, positive income this year.

-6.75%

-8.25%

-7.5%

-7.87%

Western Gas & Electric Co. is also considering financing the project with 50% equity and 50% debt. The interest rate on the companys debt will be 11%. What will be the projects ROE if it produces an EBIT of $140,000?

25.41%

30.76%

26.75%

21.40%

What will be the projects 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 Western Gas & Electric Co. as a whole will have a large, positive income this year.

-24.41%

-26.74%

-27.90%

-23.25%

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