Team Shirts had a return on equity of 23%.Average shareholders' equity for the corporation was $123,000.There were 45,000 common shares and no preferred shares outstanding.What was net income for the year?

Question

Quizplus · Accepted Answer

Net income can be calculated using the return on equity (ROE) formula: ROE = Net Income / Shareholder's Equity. Given ROE is 23% and average shareholders' equity is $123,000, net income = 0.23 * $123,000 = $28,290.

Team Shirts Had a Return on Equity of 23