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14 December, 05:58

Canine Supply has sales of $2,800, total assets of $1,900, and a debt-equity ratio of. 5. Its return on equity is 15 percent. What is the net income? Select one: a. $210 b. $130 c. $240 d. $350 e. $190

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  1. 14 December, 07:50
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    e. $190

    Explanation:

    The Net Income for the given question can be calculated through below mentioned formula:

    Return on Equity=Net income/Equity

    In the given question:

    Return on Equity=15%

    Net income=?

    While the equity shall be calculated using the following equations

    Assets=Equity+Debt

    $1,900=Equity+0.50*Equity

    $1,900=1.5*Equity

    Equity=$1,266.67

    15%=Net income/$1,266.67

    Net income=$190

    So based on the above calculations, the answer is e. $190
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Home » Business » Canine Supply has sales of $2,800, total assets of $1,900, and a debt-equity ratio of. 5. Its return on equity is 15 percent. What is the net income? Select one: a. $210 b. $130 c. $240 d. $350 e. $190
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