Question

Penny Worth Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

		Hazardous Waste		Residential Waste
Total assets		$15,606,000		$88,740,000
Noninterest-bearing current liabilities		3,366,000		13,464,000
Net income		1,903,000		6,732,000
Interest expense		1,397,000		8,184,000
Required rate of return		10%		13%
Tax rate		40%		40%

(a)

Calculate ROI for both subsidiaries. (Round answers to 2 decimal places, e.g. 15.32%.)

		Hazardous Waste		Residential Waste
ROI		(please put answer here) %		(please put answer here) %

Can you please show your work?

Answer 1