Question

Chambliss Corp.'s total assets at the end of last year were $305,000 and its EBIT was 62,500. What was its basic earning power (BEP)

Answer 1

Answer:

20.49%

Explanation:

Chamblis corporation has a total assets of $305,000

The EBIT is $62,500

Therefore the basic earning power can be calculated as follows

= $62,500/$305,000

= 0.2049×100

= 20.49%

Hence the basic earning power is 20.49%