Question

A firm has a return on equity of 17 percent. The total asset turnover is 1.6 and the profit margin is 5 percent. The total equity is $5,200. What is the amount of the net income

Answer 1

the net income amount is $884

Step-by-step explanation:

The computation of the net income is shown below:

As we know that

Return on equity (ROE) = net income ÷ total equity

So,

17% = net income ÷ $5,200

The net income is

= $5,200 × 17%

= $884

hence, the net income amount is $884

Therefore the same is to be considered