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Harrison Manufacturing has a net income of $900,000, a return on assets (ROA) of 12%, and interest expense of $320,000. The tax rate is 35%. What is the basic earning power (BEP)?

Harrison Manufacturing has a net income of $900,000, a return on assets (ROA) of 12%, and interest expense of $320,000. The tax rate is 35%. What is the basic earning power (BEP)?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 8MC: A company has wants to earn an income of $60,000 after-taxes. If the tax rate is 32%, what must be...
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Harrison Manufacturing has a net income of $900,000, a return on assets (ROA) of 12%, and interest expense of $320,000. The tax rate is 35%. What is the basic earning power (BEP)?
Transcribed Image Text:Harrison Manufacturing has a net income of $900,000, a return on assets (ROA) of 12%, and interest expense of $320,000. The tax rate is 35%. What is the basic earning power (BEP)?
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