Determining the companys return on equity


Midwest Packagings ROE last year was only 3%; but its management has developed a new operating plan that calls for a total debt ratio of 60% which will result in annual interest charges of $300,000. Manangement projects an EBIT of 1,000,000 and sales of $10,000,000 and it expects to have a total assets turnover ratio of 2.0. If the changes are made, what will be the companys return on equity?

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Finance Basics: Determining the companys return on equity
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