Internet Corporation Has EBIT of $1 Million, 30% Debt in Their

question 92

Multiple Choice

Internet Corporation has EBIT of $1 million, 30% debt in their capital structure, and total capital of $10 million. Their tax rate is 35%. What is their return on capital employed (ROCE) ?

• A)6.5%
• B)10.0%
• C)33.33%
• D)21.67%

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Definitions:

Hold-Off Circuit

The air brake circuit used to charge air to the spring brake chambers to compress the park spring. The hold-off circuit must be charged with air before a vehicle with spring brakes can move.

Service Brake Priority

A trailer air brake circuit in which air is routed first to the trailer reservoirs when the trailer supply valve (on the tractor) is activated. This means that air pressure must exceed 60 psi in the reservoirs before the hold-off circuit will charge and release the parking brakes.

Reservoirs

Structures or natural formations used for storing water or other fluids.

Hold-Off Pressure

The pressure needed to prevent a fluid or gas from moving forward or leaking in a system.