An investor is considering starting a new business. The company would require $475,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business?
A. $52,230
B. $54,979
C. $57,873
D. $60,919
E. $64,125
Answer: E
You might also like to view...
Which of the following is the first step in developing an advertising program?
A) setting the advertising budget B) developing an advertising strategy C) developing a brand message D) setting advertising objectives E) evaluating advertising campaigns
Why is culture important?
a. It allows organizational members to understand what is acceptable behaviour within the organization b. It establishes a set of norms that can be transferred to new organizational members c. It aligns members behaviour to the objective of the organization d. All of the above
All the junior-level software engineers at Tlendink, a software company, who have a master's degree in business administration are given the opportunity to apply for the position of software engineering manager in the company. In the context of human resource (HR) planning, this scenario best illustrates _____.
A. management development B. employee selection C. employee separation D. internal recruitment
The Troubled Asset Relief Program (TARP) does not permit the federal government to purchase mortgages directly
Indicate whether the statement is true or false