Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 50%, which will result in annual interest charges of $188,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $416,000 on sales of $4,000,000, and it expects to have a total assets turnover ratio of 2.2. Under these conditions, the tax rate will be 35%. If the changes are made, what will be the company's return on equity? Do not round intermediate calculations. Round your answer to two decimal places.
Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating...
Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 40%, which will result in annual interest charges of $688,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,856,000 on sales of $16,000,000, and it expects to have a total assets turnover ratio of 2.5. Under these conditions, the tax rate will be...
Pacific Packaging's ROE last year was only 5%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 50%, which will result in annual interest charges of $235,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $545,000 on sales of $5,000,000, and it expects to have a total assets turnover ratio of 1.8. Under these conditions, the tax rate will be...
Pacific Packaging's ROE last year was only 5%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which will result in annual interest charges of $736,000. The firm has no plans to use preferred stock and total assets equal total invested capital Management projects an EBIT of $1,328,000 on sales of $16,000,000, a it expects to have a total assets turnover ratio of 2.7. Under these conditions, the tax rate will be...
RETURN ON EQUITY Pacific Packaging's ROE last year was only 2%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which will result in annual interest charges of $760,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,862,000 on sales of $19,000,000, and it expects to have a total assets turnover ratio of 2.2. Under these conditions, the tax...
RETURN ON EQUITY Pacific Packaging's ROE last year was only 2%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 60%, which will result in annual interest charges of $672,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,078,000 on sales of $14,000,000, and it expects to have a total assets turnover ratio of 1.6. Under these conditions, the tax...
Return on Equity Pacific Packaging's ROE last year was only 5%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 60%, which will result in annual interest charges of $245,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $756,000 on sales of $7,000,000, and it expects to have a total assets turnover ratio of 1.4. Under these conditions, the tax...
Problem Walk-Through RETURN ON EQUITY Pacific Packaging's ROE last year was only 3%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which will result in annual interest charges of $504,000. The firm has no plans to use preferred stock and total assets equal total invested capital Management projects an EBIT of $1,204,000 on sales of $14,000,000, and it expects to have a total assets turnover ratio of 2.0. Under these conditions,...
Return on Equity Midwest Packaging's ROE last year was only 596, but its management has developed a new operating plan that calls for a debt-to-assets ratio of 40%, which will result in annual interest charges of $222,000. The firm has no plans to use preferred stock. Management projects an EBIT of $666,000 on sales of $6,000,000, and it expects to have a total assets turnover ratio of 2.6. Under these conditions, the tax rate will be 30%. If the changes...
please answer both questions 567 4.14 Pacific Packaging's ROE last year was only 4%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 45%, which will result in a $540,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $1,278,000 on sales of $18,000,000, and it expects to have a total assets turnover ratio of 3.6. Under these conditions, the tax...
7. Last year, Midwest Packaging's ROE was only 3%, but its management has developed a new operating plan that calls for a total debt ratio of 60%, which will result in annual interest charges of $300,000. Management projects an EBIT of $1,000,000 on sales of $10,000,000, and it expects to have a total assets turnover ratio of 2.0. Under these conditions, the tax rate will be 34%. If the changes are made, what will be its return on equity? (231...