Problem 12-3 Return on Investment
Consider the following information for McKinley and Son:
	12/31/2020	12/31/2021
Total assets	$55,000,000	$62,000,000
Noninterest bearing current liabilities	1,100,000	1,320,000
Net income	3,300,000	3,400,000
Interest expense	726,000	770,000
Tax rate	20%	20%
Required
a.Calculate ROI for 2020 and 2021. Round to four decimal places.
	2020	2021
Net income	$3,300,000	$3,400,000
+Interest Expense	$726,000	770,000.00
Less: Tax Savings	$145,200	154,000.00
NOPAT	$4,171,200	4,324,000.00
Assets	$55,000,000	$62,000,000
Less:Liability	1,100,000.00	1,320,000.00
Investement Capital	53,900,000.00	60,680,000.00

b. While income has increased in fiscal 2021, is it clear that the company's performance has improved?