n​ 2016, the Allen Corporation had sales of ​$60 million, total assets of ​$47 million, and total liabilities of $22 million. The interest rate on the​ company's debt is ​5.6%, and its tax rate is 35%. The operating profit margin is 12%. Compute the​ firm's 2016 net operating income and net income. Calculate the​ firm's operating return on assets and return on equity.​ (Hint: You can assume that interest must be paid on all of the​ firm's liabilities.)

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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In​ 2016, the Allen Corporation had sales of ​$60 million, total assets of ​$47 million, and total liabilities of $22 million. The interest rate on the​ company's debt is ​5.6%, and its tax rate is 35%. The operating profit margin is 12%.

  1. Compute the​ firm's 2016 net operating income and net income.
  2. Calculate the​ firm's operating return on assets and return on equity.​ (Hint: You can assume that interest must be paid on all of the​ firm's liabilities.)
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