Packaging's ROE last year was only 4%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 60%, which will result in annual interest charges of $185,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $540,000 on sales of $5,000,000, and it expects to have a total assets turnover ratio of 1.9. Under these conditions, the tax rate will be 25%. If the changes are made, what will be the company's return on equity

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A:

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A: 1) Computation:

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Q: profit

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A: Given:

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A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

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A: