TuPont Corp

question 80

Essay

TuPont Corp.has net income of $1.95 million,an effective tax rate of 35%,interest expense of $400,000,an asset turnover of 2.0,and $14 million in total assets,of which $7 million is debt.Use the Du Pont system to calculate its ROE,decomposed into leverage ratio,asset turnover,profit margin,and debt burden.