Calculate the net income and return on assets

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Question - You are considering a stock investment in one of two firms (No Equity, Inc. and No Debt, Inc.), both of which operate in the same industry and have identical operating income of $10.0 million. No Equity, Inc. finances its $25 million in assets with $24 million in assets with no debt and $25 million in equity. Both firms pay a tax rate of 30 percent on their taxable income. Calculate the net income and return on assets for the two firms.

Reference no: EM132175121

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