Problem 4-9:

BEP, ROE, AND ROIC:Broward Manufacturing recently reported the following information.

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NET INCOME = $615,000

ROA = 10%

INTEREST EXPENSE = $202,950

ACCOUNTS PAYABLE AND ACCRUALS = $950,000

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Broward's tax rate is 30%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of total invested capital is debt, and 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC).