Information on the Crum Company

Multiple Choice

Information on the Crum Company:

-Refer to Crum Company.Crum expects sales to grow by 50% in 2010, and operating costs should increase at the same rate.Fixed assets were being operated at 40% of capacity in 2009, but all other assets were used to full capacity.Underutilized fixed assets cannot be sold.Current assets and spontaneous liabilities should increase at the same rate as sales during 2010.The company plans to finance any external funds needed as 35% notes payable and 65% common stock.After taking financing feedbacks into account, and after the second pass, what is Crum's projected ROE using the projected balance sheet method?

A) 16.98%
B) 23.73%
C) 25.68%
D) 19.61%
E) 23.24%