Y3K Inc has sales of 5783 total assets of 2604 and a debt equity ratio of .75. If its return on equity is 11 percent what is its

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2 years ago

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net income

1 answer:

Vitek1552 [10] · Answer 1 · 2023-05-01T00:53:33+03:00

Based on the information given the net income is $163.66.

<h3>Net income</h3>

First step:

Profit margin = [(ROE)(Total asset)] / [(1 + Debt equity ratio)(Sales)]

Profit margin = [(.11)($2,604)] / [(1 + 0.75)( $5,783)]

Profit margin = 286.44/(1.75) ($5,783)

Profit margin = 286.44/10,120.25

Profit margin = .02830

Second step:

Profit margin = .02830 = Net income / Sales

Net income = .02830($5783)

Net income = $163.66

Inconclusion the net income is $163.66.

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