Zerog Corp. had EBIT of $450 million in 2001. It had interest expense of $30 million and a tax rate of 40%. Balance sheet data are given below in millions of dollars.

                                   2000     2001

Cash                              50         60

A/R                              150       180

Inventories                   300       360

Total CA                     500       600     

Net FA                      1000       1200

Total assets                1500       1800

A/P and accruals         100          120

Debt                            300          350

Common stock            600          600

Retained Earnings      500          730

Total Liab.& Equity    1500         1800

What is the FCF for the year 2001?

b) 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/TA 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 expect return on equity to be following the changes?