Question: If return on a certain project is 10% and loans are available at interest rate of 8%. Questions: 1. What is the return on your

If return on a certain project is 10% and loans are available at interest rate of 8%. Questions:

1. What is the return on your equity before-tax if you can only borrow 50%?

2. How about if you can borrow 80%?

(please show calculations)

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