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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Closets, Closets, Closets Corp. has $1,200,000
of interest-bearing debt outstanding, and it
pays an annual interest rate of 9%. In addition,
it has $700,000 of common stock on its balance
sheet. It finances with only debt and common
equity, so it has no preferred stock. Its annual
sales are $6.45 million, its average tax rate is
25%, and its profit margin is 9.2%. What are its
TIE ratio and its return on invested capital
(ROIC)? Round your answer to 2 decimal places
for the final answers.
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