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Tibbs Inc. had the following data for the year ending 12/31/2015: Net income = $300; Net...

Tibbs Inc. had the following data for the year ending 12/31/2015: Net income = $300; Net operating profit after taxes (NOPAT) = $320; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,300. What was its return on invested capital (ROIC)?

Select the correct answer. a. 13.91% b. 13.61% c. 13.31% d. 14.21% e. 14.51%

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Answer #1

Return on invested capital = Net operating profit after tax (NOPAT) / Total operating captial

= $320 / $2,300

= 13.91%.

Return on invested capital (ROIC) = 13.91%

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