Question

A firm has a return on equity of 16 percent. The total asset turnover is 1.5 and the profit margin is 9 percent. The total equity is $3,500. What is the net income?

Answer 1

Answer:

the net income is $560

Explanation:

The computation of the net income is shown below;

Return on equity (ROE) = net income ÷ total equity

16% = net income ÷ $3,500

net income = $3,500 × 16%

= $560

hence, the net income is $560

We simply applied the above formula so that the correct value could come

And, the same is to be considered