Roland & Company Has a New Management Team That Has

question 79

Multiple Choice

Roland & Company has a new management team that has developed an operating plan to improve upon last year's ROE. The new plan would place the debt ratio at 55 percent which will result in interest charges of $7,000 per year. EBIT is projected to be $25,000 on sales of $270,000, and it expects to have a total assets turnover ratio of 3.0. The average tax rate will be 40 percent. What does Roland & Company expect return on equity to be following the changes?

• A) 17.65%
• B) 21.82%
• C) 26.67%
• D) 44.44%
• E) 51.25%

---

Definitions:

Heart Rate

The number of heartbeats per unit of time, typically expressed as beats per minute (bpm).

Blood Pressure

The pressure of circulating blood against the walls of blood vessels, a critical parameter in assessing cardiovascular health.

Hallucinogenic

Substances that cause hallucinations, making one see, hear, or feel things that seem real but are not.

Methamphetamine

A powerful, highly addictive stimulant that affects the central nervous system, commonly known as meth.