Solutions to Questions and Problems

(Net income / Sales)(Sales / Total assets) = Net income / Total assets = ROA. With the return on equity, we can calculate the net income as: ROE = Net income / Total equity .1501= Net income / $520,000. Net income = $78,052. 11. To find the internal growth rate, we need the plowback, or retention, ratio. The plowback ratio is: b = 1 – .25 . b ... ................
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