Suppose Lost Pigeon Aviation is considering a project that will require $250,000 in assets.

	The project is expected to produce earnings before interest and taxes (EBIT) of $60,000.
	Common equity outstanding will be 30,000 shares.
	The company incurs a tax rate of 30%.

If the project is financed using 100% equity capital, then Lost Pigeon Aviations return on equity (ROE) on the project will be_________.

In addition, Lost Pigeons earnings per share (EPS) will be__________

Alternatively, Lost Pigeon Aviations CFO is also considering financing the project with 50% debt and 50% equity capital. The interest rate on the companys debt will be 13%. Because the company will finance only 50% of the project with equity, it will have only 15,000 shares outstanding. Lost Pigeon Aviations ROE and the companys EPS will be________ if management decides to finance the project with 50% debt and 50% equity.

Typically, using financial leverage will __increase/decrease________ a projects expected ROE.