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    xxashymaexx's Avatar
    xxashymaexx Posts: 1, Reputation: 1
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    #1

    Jun 30, 2010, 02:28 AM
    Finc 335 HELP!
    Y3K, Inc. has sales of $2,200, total assets of $1,000, and a debt−equity ratio of .45. If its return on equity is 16 percent, its net income is $?

    Having a hard time figuring out how to get the Net Income from this.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
    		  
    #2

    Jun 30, 2010, 03:38 AM
    You are given--in so many words--that

    Debt + Equity = 1,000

    You're also given that the Debt dollar amount is 45% of the Equity dollar amount. From that you can determine the Equity amount, in dollars.

    Then finally, they kindly mention that Net Income is 16% of Equity.

    While you're having all this fun, don't spend too much time trying to figure out how the Sales info figures into the answer--in this case, it doesn't.

    Cheers!
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