A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROA? Group of answer choices 8.4% 10.9% 12.0% 13.3% 15.1%
A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROA? Group of answer choices 8.4% 10.9% 12.0% 13.3% 15.1%
Chapter16: Financial Planning And Control
Section: Chapter Questions
Problem 14PROB
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Question
A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROA?
Group of answer choices
8.4%
10.9%
12.0%
13.3%
15.1%
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