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Calculate its basic earning power

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Reference no: EM133112141

Question - Broward Manufacturing recently reported the following information:

Net income $519,000

ROA 8%

Interest expense $171,270

Accounts payable and accruals $1,000,000

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 return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations.

Reference no: EM133112141

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