In 2016, the Allen Corporation had sales of $62 million, total assets of $47 million, and total liabilities of $19 million. The interest rate on the company's debt is 5.9 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a) Compute the firm's 2016 net operating income and net income. b) Calculate the firm's operating return on assets and return on equity.

In 2016, the Allen Corporation had sales of $62 million, total assets of $47 million, and total liabilities of $19 million. The interest rate on the company's debt is 5.9 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a) Compute the firm's 2016 net operating income and net income. b) Calculate the firm's operating return on assets and return on equity.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 12P

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