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17. Problem 4.07 (ROE and ROIC) ebook Problem Walk Through Baker Industries net income is $21,000, its interest expenses $4,
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Answer #1

ROE = Net Income/Equity

= 21000/255,000

= 8.24%

ROIC = EBIT(1-Tax)/Invested capital

= (21,000/75% + 4,000)(1-25%)/349,000

= 6.88%

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