Question
Asked Feb 22, 2019
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A firm has a ROE of 16.875%, asset turnover of 2.5, and an equity multiplier of 1.5. If the firm has sales revenue of $10,000, what is the net income? 

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Expert Answer

Step 1

Net Income: It is a computation that estimates the amount of total incomes that surpass total costs. It different words, it indicates how much incomes are available after the sum total of what expenses have been paid. It is additionally called net profit.

Step 2

Calculation of Net Income:

To calculate the net income the total assets and total equity should be calculated. The calculation of total assets and equity is shown below:

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Step 3

Now calculate the Net Income,

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