Wittels Corporation has provided the following data:
$\begin{array}{lrr}&{\text { Year 2 }} & \text { Year 1 } \
\text {Total assets }&\$ 1,253,000 & \$ 1,230,000 \
\text { Total liabilities}&\$ 586,000 & \$ 570,000 \
\text {Total stockholders' equity }&\$ 667,000 & \$ 660,000
\end{array}$ In Year 2,the company's net operating income was $42,571,its net income before taxes was $21,571,and its net income was $15,100.The company's equity multiplier is closest to:
A) 1.14
B) 0.53
C) 0.88
D) 1.87

Question

Quizplus · Accepted Answer

The equity multiplier is calculated as Total Assets / Total Stockholders' Equity. For Year 2, this is $1,253,000 / $667,000 = 1.878. Rounded, this is closest to 1.87.

Wittels Corporation Has Provided the Following Data In Year 2,the Company's Net Operating Income Was $42,571,its Net