Calculating ROIFor fiscal year 2020, LaundryMate Products had income as follows:

Total assets were $97,000,000, and noninterest-bearing current liabilities were $3,200,000. The company has a required rate of return on invested capital equal to 10 percent and a tax rate of 20 percent.

Calculate NOPAT, invested capital, and ROI for LaundryMate Products, and comment on the company's profitability. For ROI, round to two decimal places.

Sales $55,000,000

Less:

Cost of goods sold 38,400,000

Selling and administrative expense 5,700,000

Interest expense 1,000,000

Income before taxes 9,900,000

Less income taxes 1,980,000

Net income $ 7,920,000

Income tax rate =____________ divided by ________=

NOPAT = _________+ ________ X __________ =

Invested capital = _____________ - ___________=

ROI = ____________ =

Comment on company's profitability:

Consider the following after you have completed the requirements of above.

Suppose LaundryMate Products had $11,000,000 of fully depreciated equipment of which it decided to dispose. Calculate ROI after the disposal of the equipment.

NOPAT =______________+___________ x ___________=

Adjusted invested capital =_________ - __________ =

New ROI =____________ =

What incentives might a manager have to dispose of assets?