Answer:
Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.
Explanation:
Old Net profit margin = Net income/ Revenue
= $10,600/$205,000
= 5.170731707%
Old ROE = Net profit margin*Asset turnover*Equity multiplier
= 0.0517*1.33*1.75
= 12.03487805%
New net income = $10,600 + $10,250
= $20,850
New net profit margin = $20,850/$205,000
= 10.17073171%
New ROE = 0.1017*1.33*1.75
= 23.67237805%
Change in ROE = New ROE – Old ROE
= 23.67237805% - 12.03487805%
= 11.6375%
Therefore, Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.
The total cost of the ipad sold on ebay is $908.70
Answer:25,000 in 12 years = 25,000*(1.09)^12= $70,316
Value of $7,500 deposits in 6 years
Use financial calculator and input these values
N=6
PV=0
PMT=7,500
I=9
Compute FV= 56,425, after this
PV= 56,425
PMT= 15,000
I=9
N=6
Compute FV=$ 207,480
We will have (207,480+ 70,316) = $277,796 in 12 years to start our business.
Explanation: