Ask Question
BusinessBusiness
24 May, 01:17

Baker Industries' net income is $26000, its interest expense is $5000, and its tax rate is 35%. Its notes payable equals $23000, long-term debt equals $80000, and common equity equals $250000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

What are the firm's ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.

ROE %

ROIC %

+3
Answers (1)
  1. 24 May, 02:05
    0
    ROE = 10.4%

    ROIC = 7.37%

    Explanation:

    The formula for calculating return on equity (ROE) = net income divided / average shareholders' equity = $26,000 / $250,000 = 0.104 or 10.4%

    The formula for calculating return on invested capital (ROIC) = (net income - dividends) / (debt + equity) = $26,000 - $0 / [ ($23,000 + $80,000) + $250,000] = $26,000 / $353,000 = 0.0737 or 7.37%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Baker Industries' net income is $26000, its interest expense is $5000, and its tax rate is 35%. Its notes payable equals $23000, long-term ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following is measured by utility? A. The satisfaction a person gets from consumption. B. The cost of adding a single unit of something. C. The most efficient way of organizing production. D. The difference between revenue and costs.
Answers (1)
Crawford Company's standard fixed overhead rate is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit.
Answers (1)
Suppose the government of Iraq is deciding what kind of monetary policy and exchange rate regime to choose. The government wants to ensure stability in international trade and investment by pegging the Iraqi dinar to the U. S. dollar.
Answers (1)
The best type of visual aid for showing trends overtime is A) a table B) a pie chart C) a line chart D) an organization chart
Answers (1)
True or false?) possible returns on any investment can be described by a probability distribution which specifies the probability associated with each possible return the investment may generate.
Answers (2)
New Questions in Business
Soap Company manufactures soap X and soap Y and can sell all it can make of either. Hours available to produce the products are the constrained resources.
Answers (1)
Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year.
Answers (1)
All other things the same, in periods of increasing sales, net operating income will tend to increase more rapidly in a company with high variable costs and low fixed costs than in a company with high fixed costs and low variable costs.
Answers (1)
Greger Peterson is a senior manager at a public accounting firm making a base salary of $180,000 a year ($15,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.
Answers (1)
What is the usual order of accounts in the general ledger?
Answers (1)
Home » Business » Baker Industries' net income is $26000, its interest expense is $5000, and its tax rate is 35%. Its notes payable equals $23000, long-term debt equals $80000, and common equity equals $250000.
Sign Up Forgot Password?