The Mainline Corporation's gross profit was $5 million,its net income was $2 million,and operating expenses were $1 million.Its owners' equity is $100 million.Its return on equity is 2 percent.

Question

Quizplus · Accepted Answer

The return on equity is calculated as net income divided by owners' equity. In this case, the return on equity is $2 million / $100 million = 2%.

The Mainline Corporation's Gross Profit Was $5 Million,its Net Income