Question 7 2 pts Witwer Inc. is making plans for next year. It expects sales to be $300,000, operating costs to be $265,000, assets to be $200,000, and its tax rate to be 35%. Witwer Inc. is considering two different plans for next year. Your job is to compute the ROE for both plans. You will enter the ROE for Plan 1 as your answer to this problem. And, you will enter the ROE for Plan 2 as your answer to the next problem. Plan 1: Witwer will use the following capital structure to finance itself: 25% debt and 75% common equity. The interest rate on the debt would be 8.8%. But, there is a covenant in the indenture of Witwer's bonds that indicates its TIE ratio must be 4.0 or greater. Hence, Witwer also developed the following: Plan 2: Witwer will place a cap on the amount of debt it uses so that its TIE ratio is 4.0 (and not lower). Assume sales, operating costs, assets, the interest rate, and the tax rate are the same under both plans. What is the ROE for Plan 1? Please report your answer as a decimal to 4 decimal places (i.e., 0.1234) and not as a percentage. Question 8 3 pts Witwer Inc. is making plans for next year. It expects sales to be $300,000, operating costs to be $265,000, assets to be $200,000, and its tax rate to be 35%. Witwer Inc. is considering two different plans for next year. Your job is to compute the ROE for both plans. You will enter the ROE for Plan 1 as your answer to this problem. And, you will enter the ROE for Plan 2 as your answer to the next problem. Plan 1: Witwer will use the following capital structure to finance itself: 25% debt and 75% common equity. The interest rate on the debt would be 8.8% But, there is a covenant in the indenture of Witwer's bonds that indicates its TIE ratio must be 4.0 or greater. Hence, Witwer also developed the following: Plan 2: Witwer will place a cap on the amount of debt it uses so that its TIE ratio is 4.0 (and not lower). Assume sales, operating costs, assets, the interest rate, and the tax rate are the same under both plans. What is the ROE for Plan 2? Please report your answer as a decimal to 4 decimal places (i.e., 0.1234) and not as a percentage