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3 July, 20:48

Sales for the year = $324,882, Net Income for the year = $36,610, Income from equity investments = $8,603, and average Equity during the year = $123,650. Return on equity (ROE) for the year is:A. 29.6%

B. 11.3%

C. 22.7%

D. 127.6%

E. There is not enough information to answer the question.

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  1. 3 July, 20:55
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    A. 29.6%

    Explanation:

    Return on Equity is the times of profit a owner can earn on the equity investment in the business. Higher ratio shows the business is more profitable.

    As per given data

    Net Income = $36,610

    Average Equity = $123650

    Return on Equity (ROE) = Net Income / Equity Investment

    Return on Equity (ROE) = $36,610 / $123650

    Return on Equity (ROE) = 0.296

    Return on Equity (ROE) = 29.6%
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