Below are selected financial data on ABC Industries Inc. ABC faces a marginal corporate tax rate of 25%. Based on these data, what is the return on invested capital (ROIC) of ABC? Select the closest one.
| | I. | 17.2% |
| | II. | 12.0% |
| | III. | 20.1% |
| | IV. | 19.1% |
| | V. | 15.1% |
Assets Cash & Short-Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Balance Sheet (in $-millions) Liabilities $25.00 Accounts Payable $35.00 Short-Term Debt $20.00 Current Maturities of Long-Term Debt $4.00 Other Current Liabilities $84.00 Total Current Liabilities $40.00 $20.00 $10.00 $18.00 $88.00 Property, Plant & Equipment Less Accumulated Depreciation Net Property, Plant & Equipment $400.00 Long-Term Debt ($250.00) Capital Lease Obligations $150.00 Total Debt $50.00 $0.00 $50.00 Goodwill & Intangible Assets Other Long-Term Assets $50.00 Deferred Taxes $15.00 Other Long-Term Liabilities ($15.00) $17.00 Total Liabilities $140.00 Shareholders' Equity $159.00 $299.00 Total Liabilities and Shareholders' Equity $299.00 Total Assets Income Statement (in $-millions) Revenues Cost of Goods Sold Gross Profit $500.00 ($340.00) $160.00 Selling, General, and Administrative Expenses Research and Development Depreciation & Amortization Operating Income ($35.00) ($50.00) ($30.00) $45.00 Other income EBIT $3.00 $48.00 Interest Expense Pretax Income ($7.50) $40.50 Income Tax Net Income ($10.13) $30.38 Assets Cash & Short-Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Balance Sheet (in $-millions) Liabilities $25.00 Accounts Payable $35.00 Short-Term Debt $20.00 Current Maturities of Long-Term Debt $4.00 Other Current Liabilities $84.00 Total Current Liabilities $40.00 $20.00 $10.00 $18.00 $88.00 Property, Plant & Equipment Less Accumulated Depreciation Net Property, Plant & Equipment $400.00 Long-Term Debt ($250.00) Capital Lease Obligations $150.00 Total Debt $50.00 $0.00 $50.00 Goodwill & Intangible Assets Other Long-Term Assets $50.00 Deferred Taxes $15.00 Other Long-Term Liabilities ($15.00) $17.00 Total Liabilities $140.00 Shareholders' Equity $159.00 $299.00 Total Liabilities and Shareholders' Equity $299.00 Total Assets Income Statement (in $-millions) Revenues Cost of Goods Sold Gross Profit $500.00 ($340.00) $160.00 Selling, General, and Administrative Expenses Research and Development Depreciation & Amortization Operating Income ($35.00) ($50.00) ($30.00) $45.00 Other income EBIT $3.00 $48.00 Interest Expense Pretax Income ($7.50) $40.50 Income Tax Net Income ($10.13) $30.38
