Investor considering to start a new business


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 a 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

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Investor considering to start a new business
Reference No:- TGS076177

Expected delivery within 24 Hours