(Financial statement analysis) The annual sales for Salco, Inc. were $ 4.43 million last year. The firm's end-of-year balance sheet was as follows: LOADING.... Salco's income statement for the year was as follows: LOADING...

c. Given that the plant renovation in part (b ) occurs and Salco's interest expense rises by $ 53 comma 000 per year, what will be the return earned on the common stockholders' investment? Compare this rate of return with that earned before the renovation. Based on this comparison, did the renovation have a favorable effect on the profitability of the firm?

Current assets $510,000

Liabilities $993,000

Net fixed assets 1,476,000

Owners' equity 993,000

Total Assets $1,986,000

Total $1,986,000

Sales $4,430,000

Less: Cost of goods sold (3,498,000)

Gross profit $932,000

Less: Operating expenses (501,000)

Net operating income $431,000

Less: Interest expense (94,000)

Earnings before taxes $337,000

Less: Taxes(35 %) (117,950)

Net income $219,05