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We are given the following information for Pinanski, Inc.Sales$130,000 Debt 45,000 Dividends 5,000 Equity 40,000 Interest rate 7% Net income 15,000 Tax rate 30%Assume the company has no short-term deb
We are given the following information for Pinanski, Inc.
Sales$130,000 Debt 45,000 Dividends 5,000 Equity 40,000 Interest rate 7% Net income 15,000 Tax rate 30%
Assume the company has no short-term debt. Also, assume that all asset turnover, profit margin, and dividend payout ratios remain constant. What is the company's return on invested capital (ROIC)? (Hint: First, find EBIT working backwards.)
A.20.24%
B.22.45%
C.16.52%
D.18.28%
E.13.51%
F.14.94%
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****** "A 2024%" ** ************ ** **** to ********* *** ******* ****** ******** & ******** *************** rate=30%EBT=15000/(1-30%)=21428Interest=45000*7%=3150EBIT=21428+3150=24578Net operating profit ***** ********************** ******************************** ***********************************************************