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Calculate its basic earning power and return on equity

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Reference no: EM132833813

Problem - BEP, ROE, AND ROIC - Broward Manufacturing recently reported the following information:

Net income - $615,000

ROA - 10%

Interest expense - $202,950

Accounts payable and accruals - $950,000

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).

Reference no: EM132833813

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