How much net income must be expected to warrant

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Reference no: EM132750834

Problem 1: Lady Maria is thinking about starting a new business. The company would require $500,000 of assets, and it would be financed entirely with common stock. She will go forward only if she thinks the business can provide a 9.5% return on the invested capital, which means that the company must have an ROE of 9.5%. How much Net Income must be expected to warrant starting the business?

Group of answer choices

Option 1: 52,000

Option 2: 44,500

Option 3: 452,500

Option 4: 47,500

Option 5: 5,263,158

Reference no: EM132750834

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