Problem $2-19$ Debt versus Equity Financing $($LG$2-1)$

You are considering a stock investment in one of two firms $($NoEquity$,$ Inc. and NoDebt, Inc.$),$ both of which operate in the same

industry and have identical operating income of $$13\mathrm{.}5$ million. NoEquity, Inc. finances its $$75$ million in assets with $$74$ million in debt

$($on which it pays $10$ percent interest annually$)$ and $$1$ million in equity. NoDebt, Inc. finances its $$75$ million in assets with no debt and

$$75$ million in equity. Both firms pay a tax rate of $30$ percent on their taxable income.

Calculate the net income and return on assets for the two firms. $($Enter your dollar answers in millions of dollars. Round all answers

to $2$ decimal places.$)$