Question: Using the example inSection 10.3.2 Capital Structure Issues in Practice, how would the ROA and the ROE change if economic conditions made borrowing money more

  1. Using the example inSection 10.3.2 "Capital Structure Issues in Practice", how would the ROA and the ROE change if economic conditions made borrowing money more expensive? Specifically, what would be the impact if the interest rate on $50,000 was 10 percent; $100,000, 15 percent; $150,000, 17.5 percent; and $200,000, 20 percent?

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