3. (a) Debt is 20% of assets for an organization. Total assets are$10,000. The tax rate is 40%. The interest rate is 10%. EBIT profit is$1000. What is the after taxes and interest profit? What is the ROE?Profit_______________ROE________________(b) If in 1(a) debt is increased to 50% of assets, what will be the aftertaxes and interest profit and the ROE?Profit__________________ROE___________________

3. (a) Debt is 20% of assets for an organization. Total assets are$10,000. The tax rate is 40%. The interest rate is 10%. EBIT profit is$1000. What is the after taxes and interest profit? What is the ROE?Profit_ROE(b) If in 1(a) debt is increased to 50% of assets, what will be the aftertaxes and interest profit and the ROE?ProfitROE_______

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 3P

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