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Genrish500 [490]
3 years ago
7

Your sister is thinking about starting a new business. The company would require $300,000 of assets, and it would be financed en

tirely with common stock. She will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business
Business
1 answer:
Radda [10]3 years ago
5 0

Answer: $40,500

Explanation:

The company would be expected to make a net income of 13.5% of the amount invested in assets.

ROE = Net income / Equity

Net income = ROE * Equity

Assets are the same as equity in this scenario because the company is entirely funded by equity.

= 13.5% * 300,000

= $40,500

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A certain organization trying to decide where to locate their future factory is considering three locations. They are taking int
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Answer:

SITE A

Explanation:

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FACTOR___ WEIGHT _SITE A_ SITE B _SITE C

Labor Cost __ 0.25 _____92 ____82____ 84

Curr Stability _ 0.35 _____75 ___ 85____ 88

Prox Market __ 0.30 ____ 80 ____50 ___ 60

Taxes _______ 0.10 _____69 ___ 88 ___ 91

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Using the weighed factor model;

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3 years ago
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