Calculate basic earning power and return on equity

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Question: Duval Manufacturing recently reported the following information

Net income                                $585,000

ROA                                                  6%

Interest expense                        $193,050

Accounts payable and accruals     $1,000,000

Duval's tax rate is 30%. Duval finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 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) Round your answers to two decimal places.

Reference no: EM131647996

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