Sandwiches-To-Go has a return on equity of 12 % and a debt-equity ratio of.40. The total asset turnover is 1.63 and the profit margin is 5 %. The total equity is $21,400. What is the amount of the net income?
A) $2,568
B) $3,819
C) $4,186
D) $6,283
E) $6,420

Question

Quizplus · Accepted Answer

Net income can be calculated using the return on equity (ROE) formula, where ROE = Net Income / Equity. Given ROE is 12% and total equity is $21,400, the net income = 0.12 * $21,400 = $2,568.

Sandwiches-To-Go Has a Return on Equity of 12 % and a Debt-Equity