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What is the projected roe under the restricted policy

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Reference no: EM132899439

Question - Ben Corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. The firm's annual sales are expected to total $2,400,000, its fixed assets turnover ratio equals 3.0, and its debt and common equity are each 50% of total assets which is composed of fixed and current assets. EBIT is $130,000, the interest rate on the firm's debt is 8%, and the tax rate is 30%. If the company follows a restricted policy, its total assets turnover will be 2.4. Under a relaxed policy its total assets turnover will be 2.0.

How much would be the current assets under relaxed policy?

What is the projected ROE under the restricted policy?

What is the TIE ratio under relaxed policy?

Reference no: EM132899439

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