In 2016, the Allen Corporation had sales of $ 68 million, total assets of $ 50 million, and total liabilities of $ 18 million. The interest rate on the company's debt is 5.8 percent, and its tax rate is 35 percent. The operating profit margin is 13 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 $ nothing million. (Round to two decimal places.)

Explanation:

Sales - $68,000,000

Total assets - $50,000,000

Total Liabilities - $18,000,000

Interest rate - 5.8%

Tax rate - 35%

Profit margin - 13%

a)

1)Net operating income = Sales * Operating profit margin

68,000,000*13%= $8,840,000

2)Net Income =  Operating income -         8,840,000

Interest expense (5.8%* 18,000,000)       (1,044,000)

Income before tax                                      7,796,000

Income tax (30%)                                        (2,338,000)

                                                                    5,458,000

b)

1)Operating return on assets = net operating income /assets *100

= 8,840,000/50,000,000*100= 17.68%

2)Return on equity.

Net income / Equity * 100

Equity = 50,000,000 - 18,000,000 = 32,000,000

5,458,000/32,000,000*100= 17.06%

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know