Question: Sombra Corp. is also considering financing the project with 50% equity and 50% debt. The interest rate on the companys debt will be 12%. What

Sombra Corp. is also considering financing the project with 50% equity and 50% debt. The interest rate on the companys debt will be 12%. What will be the projects ROE if it produces an EBIT of $140,000?

14.70%

15.75%

22.05%

21.00%

What will be the projects ROE if it produces an EBIT of $40,000 and it finances 50% of the project with equity and 50% with debt? When calculating the tax effects, assume that Sombra Corp. as a whole will have a large, positive income this year.

-15.81%

-17.57%

-16.69%

-21.96%

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