What is the ROE for a firm with a timesinterest earned ratio of 2, a tax liability of $1million, and interest expense of $1.5 millionif equity equals $1.5 million? A. 26.67% B.30.00% C. 33.33% D. 50.00% Wizard Co. isconsidering a project that will require $650,000 in assets.The project will be financed with 100% equity. The companyfaces a tax rate of 40%. What will be the ROE (return onequity) for this project if it produces an EBIT of -$40,000?When calculating the tax effects, assume that Wizard Co.as a whole will have a large, positive income this year. O -3.0% O-3.7% O-4.4% 0 -3.1%

Step 1:Times interest eared ratio measures the earnings of the company to pay the interest on long…

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