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will like for correct answer asap For the last fiscal year, your firm reported a return on assets (ROA) of 6.0 percent and a return
will like for correct answer asap
For the last fiscal year, your firm reported a return on assets (ROA) of 6.0 percent and a return on equity (ROE) of 15 percent. This was on sales of $36,000,000 and total assets of $30,000,000. Your CFO noted that the difference between the firm's basic earnings power (BEP) and its cost of debt (interest rate on debt is 6.2 percent) amplified ROE handsomely. Assuming a tax rate of 40 percent, calculate your firm's basic earnings power. Note: BEP = EBIT / Total Assets. Enter your answer in decimal format to 4-decimal places. For example, if your answer is 9.55%, enter 0.0955 Step by Step Solution
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