The firm A has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000,
The firm A has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent. The firm B has a profit margin of 20 percent on sales of 15,000,000. If the firm B has debt of 6,500,000, total assets of 18,500,000 and an after tax interest cost on total debt of 5 percent. Then which firm's ROA is better?
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Authors: Hal Scott, Anna Gelpern
21st Edition
1634602048, 978-1634602044
