Sombra Corp. is considering a project that will require $600,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 40%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $160,000?

0 12.0%

0 16.0%

0 16.8%

0 13.6% Determine what the project's ROE will be if its EBIT is -$60,000. When calculating the tax effects, assume that Sombra Corp. as a whole will have a large, positive income this year.

0 -4-.8/o

O -6.9%

O -5.7%

O -6.0% Sombra Corp. is also considering financing the project with 50% equity and 50% debt. The interest rate on the company's debt will be 11%. What will be the project's ROE if it produces an EBIT of $160,000?

0 19.1%

0 24.1%

0 17.8%

0 25.4%