A manufacturing company has a profit margin of 12% on sales of $18,000,000. The firm has total assets of $25,000,000 and total debt of $8,000,000. The after-tax interest cost on total debt is 4.5%. What is the firm's Return on Assets (ROA)? A) 9.88% B) 8.64% C) 10.12% D) 7.92%
A manufacturing company has a profit margin of 12% on sales of $18,000,000. The firm has total assets of $25,000,000 and total debt of $8,000,000. The after-tax interest cost on total debt is 4.5%. What is the firm's Return on Assets (ROA)? A) 9.88% B) 8.64% C) 10.12% D) 7.92%
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 5EB: During the current year. Plainfield Manufacturing earned income of $845,000 from total sales of...
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Transcribed Image Text:A manufacturing company has a profit
margin of 12% on sales of $18,000,000.
The firm has total assets of $25,000,000
and total debt of $8,000,000. The after-tax
interest cost on total debt is 4.5%.
What is the firm's Return on Assets
(ROA)?
A) 9.88%
B) 8.64%
C) 10.12%
D) 7.92%
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