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Duval Manufacturing recently reported the following information: Net income $310,000 ROA 15.50% Interest expense $140,000 Duval’s...

Duval Manufacturing recently reported the following information:
Net income $310,000
ROA 15.50%
Interest expense $140,000
Duval’s tax rate is 41.0%.
What is its basic earning power (BEP) ratio?

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Answer #1

Step 1: Find EBIT:

Step 2: Find Total Assets:

Step 3: Find Basic Earning Power (BEP):

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