Problem:
Duffert Industries has total assets of $1,000,000 and total current liabilities (consisting only of accounts payable and accruals) of $125,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 8% and its tax rate is 40%. The firm's basic earning power ratio is 15% and its debt-to capital rate is 40%.
Required:
Question: What are Duffert's ROE and ROIC?
Note: Please show basic calculation