Firms hl and ll are identical except for their financial leverage ratios and the interest rates they pay on debt. each has $20 million in invested capital, has $4 million of ebit, and is in the 40% federal-plus-state tax bracket. firm hl, however, has a debt-to-capital ratio of 50% and pays 12% interest on its debt, whereas ll has a 30% debt-to-capital ratio and pays only 10% interest on its debt. neither firm uses preferred stock in its capital structure. a. calculate the return on invested capital (roic) for each firm. b. calculate the return on equity (roe) for each firm. c. observing that hl has a higher roe, ll’s treasurer is thinking of raising the debt-to-capital ratio from 30% to 60% even though that would increase ll’s interest rate on all debt to 15%. calculate the new roe for ll.

Acompetitive market in healthcare would a. overprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers b. underprovide healthcare because it would eliminate medicare and medicaid c. underprovide healthcare because the marginal social benefit of healthcare exceeds the marginal benefit perceived by consumers d. overprovide healthcare because it would be similar to the approach used in canada

What resourse is both renewable and inexpensive? gold coal lumber mineral

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.