Transcribed Image Text
Baker Industries’ net income is $26000, its interest expense is$4000, and its tax rate is 35%. Its notes payable equals $24000,long-term debt equals $75000, and common equity equals $255000. Thefirm finances with only debt and common equity, so it has nopreferred stock.What are the firm’s ROE and ROIC? Round your answers to twodecimal places. Do not round intermediate calculations. ROE and ROICNet income$26,000Interest expense$4,000Tax rate35.00%Notes payable$24,000Long-term debt$75,000Common equity$255,000ROEPartial Income Statement:EBITInterest$4,000.00EBTTaxesNet income$26,000.00Capital Summary:Notes payable$24,000.00Long-term debt$75,000.00Common equity$255,000.00Total invested capitalROIC