1. If managers want to earn a 12% ROA, how much profit must the company generate?
2. If managers want to earn a 15% ROA, how much profit must the company generate?
Non-current assets ........... $ 1,260,000
Current assets ............. 250,000
Profit for the year .......... 170,000
Cost of debt (after tax) ........ 12%
Cost of equity ............. 12%