A firm's after-tax operating income was $1,050,000 and after-tax interest expense was $250,000 in 2013. It started the year with $5,050,000 in equity financing, $3,050,000 in long-term debt, and total assets of $10,050,000. It ended the year with $5,500,000 in equity financing, $4,050,000 in long- term debt, and $12,050,000 in total assets. The additional capital raised during 2013 started to affect the operating income in 2014. What is the return on assets for 2013?

Corporate Fin Focused Approach
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ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter2: Financial Statements, Cash Flow, And Taxes
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A firm's after-tax operating income was $1,050,000 and after-tax interest
expense was $250,000 in 2013. It started the year with $5,050,000 in equity
financing, $3,050,000 in long-term debt, and total assets of $10,050,000. It
ended the year with $5,500,000 in equity financing, $4,050,000 in long-
term debt, and $12,050,000 in total assets. The additional capital raised
during 2013 started to affect the operating income in 2014. What is the
return on assets for 2013?
Transcribed Image Text:A firm's after-tax operating income was $1,050,000 and after-tax interest expense was $250,000 in 2013. It started the year with $5,050,000 in equity financing, $3,050,000 in long-term debt, and total assets of $10,050,000. It ended the year with $5,500,000 in equity financing, $4,050,000 in long- term debt, and $12,050,000 in total assets. The additional capital raised during 2013 started to affect the operating income in 2014. What is the return on assets for 2013?
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