Zipp Corp. is considering a project that will require $700,000 in assets. The project will be finances with 100%. The company faces a tax rate of 40%.
Ziff Corp. is also considering financing the project with 50% equity and 50% debt. The interest rate on the company's debt will be 11%. What will be the project's ROE if it produces an EBIT of $150,000? Please show work