Canine Supply has sales of $2,800, total assets of $1,900, and a debt-equity ratio of .5. Its return on equity is 15 percent. What is the net income? Select one: a. $210 b. $130 c. $240 d. $350 e. $190

e. $190

Explanation:

The Net Income for the given question can be calculated through below mentioned formula:

Return on Equity=Net income/Equity

In the given question:

Return on Equity=15%

Net income=?

While the equity shall be calculated using the following equations

Assets=Equity+Debt

$1,900=Equity+0.50*Equity

$1,900=1.5*Equity

Equity=$1,266.67

15%=Net income/$1,266.67

Net income=$190

So based on the above calculations, the answer is e. $190

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