Best-Ever Chicken has a debt-equity ratio of. 94. Return on assets is 8.5 percent, and total equity is $520,000. What is the net income? a. $74,909b. $88,880c. $44,200d. $85,748e. $41,548

d. $85,748

Explanation:

For computing the net income we have to do the following calculations

Debt equity ratio = (Total debt : Shareholders' Equity)

0.94 = (Total debt : $520,000)

So, the total debt = $520,000 * 0.94 = $488,800

And, the total assets would be equal to

= Total debt + total equity

= $488,800 + $520,000

= $1,008,800

Return on assets = (Net income) : (total assets)

8.5% = Net income : $1,008,800

Hence, net income = $85,748