Answer: $292,754.76
Explanation:
The company's net income will be calculated thus:
First, we need to know the asset invested which will be:
Asset turnover = Net sales / Asset invested
2.89 = 11,655,000 / Asset
Asset invested = 11,655,000 /2.89
Asset invested = $4,032,871.97
Then, the weight of equity will be:
= 1 / (1+1.43)
= 1 /2.43
= 0.41152
Then, the equity will be:
= $4,032,871.97 × 0.41152
= $1,659,607.47
ROE = Net income / Equity
17.64% = Net income/Equity
0.1764 = Net Income / 1,659,607.47
Therefore, Net income will be:
= $1,659,607.47 × 0.1764
= $292,754.76
