Broward Manufacturing recently reported the following information:

Net Income………………………$460,000

ROA……………………………..8%

Interest expense…………………$138,000

Accounts Payable & Accruals…..$1,000,000

Broward’s tax rate is 30%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity.

Required:

Calculate its return on invested capital (ROIC).

Answer rating: 100% (QA)

Return on invested capital is a calculation used to assess a companys efficiency at allocating th... View the full answer