Question

​(Analyzing Profitability) In​ 2016, the Allen Corporation had sales of

$ 61$61

​million, total assets of

$ 50$50

​million, and total liabilities of

$ 20$20

million. The interest rate on the​ company's debt is

5.85.8

​percent, and its tax rate is

3535

percent. The operating profit margin is

1212

percent.

a. Compute the​ firm's 2016 net operating income and net income.

b. Calculate the​ firm's operating return on assets and return on equity.​ (Hint: You can assume that interest must be paid on all of the​ firm's liabilities.)

a. Compute the​ firm's 2016 net operating income and net income.

The​ firm's 2016 net operating income is _ million. ​ (Round to two decimal​ places.)

Answer 1