Current Assets	$250,000.00
Noncurrent Assets	$1,750,000.00
Total Assets	$2,000,000.00
Liabilities and Equity
Current Liabilities	$200,000.00
Noncurrent Liabilities (8% Bonds)	$675,000.00
Common Stockholders' Equity	$1,125,000.00
Total Liabilities and Equity	$2,000,000.00

Additional Information:

• Net income for 2014 is $157,500.
• Income tax rate is 50%.
• Amounts for total assets and shareholders' equity are the same for 2013 and 2014.
• All assets and current liabilities are considered to be operating
• Determine whether leverage (from long-term debt) benefits Rose's shareholders. (Hint: Examine ROCE with and without leverage.)
• Compute the NOPAT and RNOA (use ending NOA).
• Demonstrate the favorable effect of leverage given the disaggregation of ROCE and your answer to part (B).