Alpha Engineering invested $30 million using a D-E mix of 65%–35% for the development, marketing, and delivery of a web-based training program for project management. Determine the return on the company’s equity if the net income from the sale of the program for the first year was $4 million from total revenue of $6 million.
What will be an ideal response?
Company’s equity = 30(0.35) = $10.5 million
Return on equity = (4/10.5)(100%) = 38.1%
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What will be an ideal response?
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