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Drayton Biotech Ltd. is evaluating a project that requires an investment of $850,000 in assets. The project will be financed with 100% equity. The company has a tax rate of 30%. If the project is expected to generate EBIT of $180,000, what will be the ROE (Return on Equity)? a. 12.3% b. 13.5% c. 14.8% d. 15.2%

Drayton Biotech Ltd. is evaluating a project that requires an investment of $850,000 in assets. The project will be financed with 100% equity. The company has a tax rate of 30%. If the project is expected to generate EBIT of $180,000, what will be the ROE (Return on Equity)? a. 12.3% b. 13.5% c. 14.8% d. 15.2%

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...
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What will be the Return on Equity on these financial accounting question?

Drayton Biotech Ltd. is evaluating a project that requires an investment of $850,000 in assets. The project will be financed with 100% equity. The company has a tax rate of 30%. If the project is expected to generate EBIT of $180,000, what will be the ROE (Return on Equity)? a. 12.3% b. 13.5% c. 14.8% d. 15.2%
Transcribed Image Text:Drayton Biotech Ltd. is evaluating a project that requires an investment of $850,000 in assets. The project will be financed with 100% equity. The company has a tax rate of 30%. If the project is expected to generate EBIT of $180,000, what will be the ROE (Return on Equity)? a. 12.3% b. 13.5% c. 14.8% d. 15.2%
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