Suppose that Acme Inc. had a net income of $20,000 on sales of $325,000 and total assets are $240,000 at the end of the fiscal year. The firm's debt to assets ratio was 45.0%. What is the return on equity? (Hint: use the DuPont relationship and change debt/assets to equity/assets, and finally to assets/equity) A. 13.82% B. 14.47% C. 15.15% D. 15.86% E. 15.27% 32°C A
Suppose that Acme Inc. had a net income of $20,000 on sales of $325,000 and total assets are $240,000 at the end of the fiscal year. The firm's debt to assets ratio was 45.0%. What is the return on equity? (Hint: use the DuPont relationship and change debt/assets to equity/assets, and finally to assets/equity) A. 13.82% B. 14.47% C. 15.15% D. 15.86% E. 15.27% 32°C A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Suppose that Acme Inc. had a net income of $20,000 on sales of $325,000 and
total assets are $240,000 at the end of the fiscal year. The firm's debt to assets
ratio was 45.0%. What is the return on equity? (Hint: use the DuPont relationship
and change debt/assets to equity/assets, and finally to assets/equity)
A. 13.82%
B. 14.47%
C. 15.15%
D. 15.86%
E. 15.27%
32°C
A
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