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For the coming year, Crane Inc.is considering two financial plans.Management expects sales to be $301,770, operating costs to be $266,545, assets to be $200,000, and its tax rate to be 25%.Under Plan A it would use 25% debt and 75% common equity.The interest rate on the debt would be 8.8%, but the TIE ratio would have to be kept at 4.00 or more.Under Plan B the maximum debt that met the TIE constraint would be employed.Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant, by how much would the ROE change in response to the change in the capital structure?
Resources Consumption
The use of natural, human, and economic resources to satisfy human needs and wants, often evaluated in terms of sustainability.
Mexico City
The densely populated capital of Mexico, known for its rich cultural heritage, significant historic landmarks, and air pollution challenges.
Breathing Air
The act of inhaling and exhaling atmospheric air, essential for respiration in humans and many other organisms.
Megacities
Urban areas that exceed populations of ten million people, often facing unique challenges related to infrastructure, population density, and environmental impact.
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