Edwards Enterprises follows a moderate current asset investment policy,but it is now considering a change,perhaps to a restricted or maybe to a relaxed policy.The firm's annual sales are $400,000;its fixed assets are $100,000;its target capital structure calls for 50% debt and 50% equity;its EBIT is $39,000;the interest rate on its debt is 10%;and its tax rate is 40%.With a restricted policy,current assets will be 15% of sales,while under a relaxed policy they will be 25% of sales.What is the difference in the projected ROEs between the restricted and relaxed policies? Do not round intermediate calculations.
A) 4.91%
B) 4.50%
C) 5.85%
D) 4.45%
E) 4.68%

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11ea856c_8b4d_1bdc_9aec_bdbea293c8e8_TB1222_00 ? 11ea856c_8b4d_1bdd_9aec_1d0cbd51747c_TB1222_00 ? 11ea856c_8b4d_42ee_9aec_c783e78c929e_TB1222_00 ? 11ea856c_8b4d_42ef_9aec_8310e9fef868_TB1222_00 Difference in ROE = 5.85%
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Edwards Enterprises Follows a Moderate Current Asset Investment Policy,but It