QUESTION 2

1. You are given the following information for Western, Inc.

   Sales	240,000
   Debt	110,000
   Dividends	5,000
   Equity	30,000
   Interest rate	7%
   Net income	16,000
   Tax rate	30%

   Assume the company has no short-term debt. Also assume that all asset turnover, profit margin, and dividend payout ratios remain constant. (Hint: First prepare income statement working backwards from the bottom to find EBIT.) What is the companys return on invested capital (ROIC)?

   	A.	21.04%
   	B.	19.43%
   	C.	18.11%
   	D.	17.01%
   	E.	16.08%
   	F.	15.28%
   	G.	14.59%
   	H.	13.98%