Question
roward Manufacturing recently reported the following information: Net income $315,000 ROA 9% Interest expense $122,850 Accounts payable and accruals $1,050,000 Broward's tax rate is 40%.
roward Manufacturing recently reported the following information:
| Net income | $315,000 |
| ROA | 9% |
| Interest expense | $122,850 |
| Accounts payable and accruals | $1,050,000 |
Broward's tax rate is 40%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations. Round your answers to two decimal places.
| BEP | % |
| ROE | % |
| ROIC | % |
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Financial Management for Public, Health and Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
5th edition
1506326846, 9781506326863, 1506326862, 978-1506326849
