Nova Inc. has an EBIT of $1.5 million, 40% debt in their capital structure, and total capital of $12 million. Their tax rate is 30%. What is their Return on Capital Employed (ROCE)? A) 8.75% B) 12.50% C) 25.00% D) 18.33%

Nova Inc. has an EBIT of $1.5 million, 40% debt in their capital structure, and total capital of $12 million. Their tax rate is 30%. What is their Return on Capital Employed (ROCE)? A) 8.75% B) 12.50% C) 25.00% D) 18.33%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...

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Question

What is the return on capital employed of this financial accounting question?

Nova Inc. has an EBIT of $1.5 million, 40% debt in their capital structure, and
total capital of $12 million. Their tax rate is 30%. What is their Return on Capital
Employed (ROCE)?
A) 8.75%
B) 12.50%
C) 25.00%
D) 18.33%

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