Broward Manufacturing recently reported the following information:Net income $615,000ROA 10%Interest expense $202,950Accounts payable and accruals $950,000Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferredstock. 40% of its total invested capital is debt, and 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).
Broward Manufacturing recently reported the following information:Net income $615,000ROA 10%Interest expense $202,950Accounts payable and accruals $950,000Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferredstock. 40% of its total invested capital is debt, and 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).
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...
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Broward Manufacturing recently reported the following information:
Net income $615,000
ROA 10%
Interest expense $202,950
Accounts payable and accruals $950,000
Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred
stock. 40% of its total invested capital is debt, and 60% of its total invested capital is common equity.
Calculate its basic earning power (BEP), itsreturn on equity (ROE), and its return on invested capital
(ROIC).
Net income $615,000
ROA 10%
Interest expense $202,950
Accounts payable and accruals $950,000
Broward’s tax rate is 25%. Broward finances with only debt and common equity, so it has no preferred
stock. 40% of its total invested capital is debt, and 60% of its total invested capital is common equity.
Calculate its basic earning power (BEP), its
(ROIC).
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