Question

1. Gebze Shipyards has $15.0 million in total invested operating capital, and its WACC is 10%. Gebze has the following income statement:

Sales	$12.0 million
Operating costs	6.0 million
Operating income (EBIT)	$ 6.0 million
Interest expense	2.0 million
Earnings before taxes (EBT)	$ 4.0 million
Taxes (20%)	0.8 million
Net income	$ 3.2 million

What is Gebze’s EVA?

2. GTYOC Aviation had a profit margin of 8.00%, a total assets turnover of 1.5, and an equity multiplier of 2.0. What was the firm's ROE?

3. Last year FBGS Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's total-debt-to-total-capital ratio was 15.0%. The firm finances using only debt and common equity and its total assets equal total invested capital. Based on the DuPont equation, what was the ROE?

4. MUMC Corp's sales last year were $4,500,000, its operating costs were $1,500,000, and its interest charges were $120,000. What was the firm's times-interest-earned (TIE) ratio?

Answer 1

QiEVA EBIT*(1-Tax rate)-Capital Employed*WACC 6000000*(1-0.2)-15000000*0.1 $ 3,300,000

Q2 ROE Profit Margin*Asset Turnover*Equity multiplier 0.08*1.5*2.0 0.24 24.00%!