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A firm has a profit margin of 15%, on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost, on total debt of 5%, what is the firm's ROA?

A firm has a profit margin of 15%, on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost, on total debt of 5%, what is the firm's ROA?

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
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A firm has a profit margin of 15%, on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost, on total debt of 5%, what is the firm's ROA?
Transcribed Image Text:A firm has a profit margin of 15%, on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost, on total debt of 5%, what is the firm's ROA?
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