Question

odule 1 Homework Assignment Scone 63.33s Save Submit Assignment for Grading 14 of 20 a Check My Work (3 remaining) Click here to read the eBook: Potential Misuses of Roe DuPONT AND NET INCOME Precious Metal Mining has $20 million in sales, its ROE is 11%, and its total assets turnover is 2.5x. Common eq.ty on the firm's balance sheet is 40%of its total assets, what is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediete stops

Answer 1

Answer =
Ttoal Assets Turnover = 2.5X
So, Total Assets = $ 20,000,000 / 2.5 =	$         80,00,000
Common Equity = 40% of total Assets =	$         32,00,000
(40 % of $ 8,000,000)
Return of Equity = 11% of Common Equity
So net Income -Return of Equity = 11% of $ 3,200,000 =	$           3,52,000
Answer = $ 352,000