show all proper working.

dont use excel please. written exam.

Q.2. Murree Brewery Company is considering the following two alternative working capital investment and financing policies: Policy A Policy B Rs 60,000,000 Current assets Rs 90,000,000 Fixed Assets 100,000,000 100,000,000 Total assets 190,000,000 160,000,000 Short-term debt 34,200,000 57,600,000 Long-term debt 79,800,000 38,400,000 Total debt 114,000,000 96,000,000 Total equity 76,000,000 64,000,000 Forecasted sales next year are $150 million. EBIT is projected to be 20 percent of sales. The company's income tax rate is 40 percent. Interest rates on the company's short term and long-term debt are 10 and 14 percent, respectively. Determine the expected rate of return on equity under each of the working capital policies. [Marks 04)