Question

In​ 2016, the Allen Corporation had sales of $67 ​million, total assets of $43 ​million, and total liabilities of $ 21 million. The interest rate on the​ company's debt is 5.6 ​percent, and its tax rate is 35 percent. The operating profit margin is 14 percent.

a. The​ firm's 2016 net operating income is ​$______million (Round to two decimal​ places.)

b. Calculate the​ firm's operating return on assets and return on equity.​ (Hint: You can assume that interest must be paid on all of the​ firm's liabilities.)

Answer 1