LANY Corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. The firm's annual sales are expected to total $2,400,000, its fixed assets turnover ratio equals 3.0, and its debt and common equity are each 50% of total assets which is composed of fixed and current assets. EBIT is $130,000, the interest rate on the firm's debt is 8%, and the tax rate is 30%. If the company follows a restricted policy, its total assets turnover will be 2.4. Under a relaxed policy its total assets turnover will be 2.0. 1.) How much would be the current assets under relaxed policy? Use 2 decimal places for your final answer 2.) Refer to the previous item, what is the projected ROE under the restricted policy? Use 2 decimal places
LANY Corporation is deciding whether to pursue a restricted or relaxed
1.) How much would be the current assets under relaxed policy? Use 2 decimal places for your final answer
2.) Refer to the previous item, what is the projected ROE under the restricted policy? Use 2 decimal places for your final answer
3.) Refer to the previous item, what is the TIE ratio under the relaxed policy? Use 2 decimal places for your final answer
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