Business, 12.02.2021 14:00 nickddj12

Pacific Packaging's ROE last year was only 6%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 60%, which will result in annual interest charges of $627,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $2,261,000 on sales of $19,000,000, and it expects to have a total assets turnover ratio of 1.4. Under these conditions, the tax rate will be 25%. If the changes are made, what will be the company's return on equity

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Pacific Packaging's ROE last year was only 6%, but its management has developed a new operating plan...

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