Refer to the data for Hardwig,Inc.Assume now that the company believes that if it adopts a restricted policy,its sales will fall by 15% and EBIT will fall by 10%,but its total assets turnover,debt ratio,interest rate,and tax rate will all remain the same.In this situation,what's the difference between the projected ROEs under the restricted and relaxed policies?
A) 2.24%
B) 2.46%
C) 2.70%
D) 2.98%
E) 3.27%

Question

Quizplus · Accepted Answer

Explanation:The ROE under the restricted policy is 10.46% and the ROE under the relaxed policy is 12.70%. The difference between the two is 12.70% - 10.46% = 2.24%.

Refer to the Data for Hardwig,Inc