Answer the Questions Below Based on the Following Information

question 14

Essay

Answer the questions below based on the following information.The tax rate is 35% and all dollars are in millions.Assume that the companies have no liabilities other than the debt shown below.a.Calculate each company's ROE,ROA,and ROIC.b.Why is Runrun's ROE so much higher than Suunto's? Does this mean Runrun is a better company? Why or why not?
c.Why is Suunto's ROA higher than Runrun's? What does this tell you about the two companies?
d.How do the two companies' ROICs compare? What does this suggest about the two companies?
$$\begin{array} { l r r } \hline & \text { Suunto Inc. } & \text { Runrun Corp. } \\\hline \text { Earnings before interest and taxes } & \$ 280 & \$ 294 \\\text { Debt (at } 10 \% \text { interest) } & \$ 140 & \$ 840 \\\text { Equity } & \$ 560 & \$ 210 \\\hline\end{array}$$

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Definitions:

Domain-specific Adaptation

Adaptations or adjustments that are specific to particular areas or fields of activity.

Domain-general Adaptation

A concept referring to the ability or process of adjusting or conforming across various areas or situations, not limited to a specific field or domain.

Controlled Process

A type of cognitive processing that requires deliberate, effortful attention and is often contrasted with automatic processes.

Adaptations

Attributes that improve an individual’s prospects for survival and reproduction.