52208 Total Capital NI: 1.25 A 106 1.04 T=.40 Em Use the following information for the next 3 questions: Fanning Products has $20 billion of sales and $12 billion of net income Its total assets are $10 billion Assume the company's total assets equal total invested capital, and its capital consists of 30% debt and 70% common equity. The firm's interest rate is 6%, and its tax rate is 40% ROE = Por AT iv What is the firm's ROE? - 150 JOL a 16.73 percent 5706 VOL b. 16.98 percent .1714 -.16*2 x 14286 17.14 percent d. 17.28 percent e. 17.56 percent 7 17.14% V What is the firm's ROIC? (Note: "invested capital" - Total capital - A/P - Accruals, since A/P & Accruals are not actively invested into the company like Equity, NP & L-T Debt) a. 12.00 percent ROICE BIT (1) 6) b. 12.37 percent 10., EBET C 12.67 percent -1 d. 13.08 percent EBT 76 e. None of the above is within 0.1% of the correct answer . XT NI 1.26 vi a Would this firm's ROA increase if it used less leverage (debt)? (The size of the firm does not change.) ROA would increase b. ROA would decrease ROA would stay exactly the same d. Both ROA and ROE would increase. e. Both ROA and ROE would decrease c