Considering financing project with equity and debt

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Zipp Corp. is considering a project that will require $700,000 in assets. The project will be finances with 100%. The company faces a tax rate of 40%.

Ziff 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 $150,000? Please show work

Reference no: EM131072445

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