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Broward Manufacturing recently reported the following information: Net Income$460,000 ROA..8% Interest expense$138,000 Accounts Payable & Accruals..$1,000,000 Browards tax rate is 30%. Broward finances with only
Broward Manufacturing recently reported the following information:
Net Income………………………$460,000
ROA……………………………..8%
Interest expense…………………$138,000
Accounts Payable & Accruals…..$1,000,000
Broward’s tax rate is 30%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity.
Required:
Calculate its return on invested capital (ROIC).Step by Step Solution
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