Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance

An investor is considering starting a new business.

Customer Question
An investor is considering starting...
An investor is considering starting a new business. The company would requite $500,000 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 15.0% return on the invested capital, which means that the firm must have an ROE of 15.0%. How much income must be expected to warrant starting a new business?
Submitted: 8 years ago.Category: Finance
Show More
Show Less
Ask Your Own Finance Question
Answered in 15 minutes by:
6/22/2009
Financial Professional: Annie Kavitha, Lecturer replied 8 years ago
Annie Kavitha
Annie Kavitha, Lecturer
Category: Finance
Satisfied Customers: 1,024
Experience: M.Com
Verified

HelloCustomer

 

Total assets = 500,000 = total equity

 

ROE = Net income/ Total equity = 15%

 

Net income = 500,000 x 15%

 

= 75,000

 

 

 

Annie Kavitha
Annie Kavitha, Lecturer
Category: Finance
Satisfied Customers: 1,024
Experience: M.Com
Verified
Annie Kavitha and 87 other Finance Specialists are ready to help you
Ask your own question now
Ask Annie Kavitha Your Own Question
Annie Kavitha
Annie Kavitha
Annie Kavitha, Lecturer
Category: Finance
Satisfied Customers: 1,024
1,024 Satisfied Customers
Experience: M.Com

Annie Kavitha is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,920 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
When a company experiences a large number of shares sold off
When a company experiences a large number of shares sold off around 5 million out of 46,000,000 at 8.40 average per share, does this lower that companies capital? Common shares were sold… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
1) Which of the following categories of owners have limited
1) Which of the following categories of owners have limited liability? A. General partners B. Sole proprietors C. Shareholders of a corporation D. Both a and b 2) Which of the following best describes… read more
Manal Elkhoshkhany
Manal Elkhoshkhany
Tutor
1,920 satisfied customers
1) In terms of organizational costs, which of the following
1) In terms of organizational costs, which of the following sequences is correct, moving from lowest to highest cost? A. Sole proprietorship, general partnership, limited partnership, corporation B. C… read more
Johnmark1900
Johnmark1900
Finance Manager
Chartered Accountant
24 satisfied customers
1. The primary goal of a publicly-owned firm interested in
1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to (Points: 1) a. Maximize expected total corporate profit. b. Maximize expected EPS. c. Minimize the chan… read more
Manal Elkhoshkhany
Manal Elkhoshkhany
Tutor
1,920 satisfied customers
This is a Balance Sheet question. Can you handle it? On
This is a Balance Sheet question. Can you handle it? … read more
Carter McBride
Carter McBride
LLM
233 satisfied customers
1. Jakes Inc. recently reported net income of $4,750 and depreci
1. Jake's Inc. recently reported net income of $4,750 and depreciation of $885. How much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets. 2. Jakes's In… read more
RD
RD
Self Employed
Master's Degree
1,164 satisfied customers
Corporate Liquidation - I have not done one is all of these
Corporate Liquidation - I have not done one is all of these years. I just need assurance on the simple set of facts. All assets sold in prior year, no liabilities exist and the current year has a smal… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
If $ are moved off shore, the income is still taxable to a
if $ are moved off shore, the income is still taxable to a US taxpayer, but is it free of judjements from a Federal receiver? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a question about the value of one common stock. If I
Hi,I have a question about the value of one common stock. If I know the value of the total company, should I divide the value of the total company by the number of the ISSUED stocks or the number of t… read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
286 satisfied customers
I need to determine the value of the company in order to
Hi,I need to determine the value of the company in order to issue stock options for my employees. What will be the best method to use what is the formula?I own a small start up company which provides … read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
286 satisfied customers
Why is it that in evaluating commercial properties, the cap
why is it that in evaluating commercial properties, the cap rate (rate of return) is inversely related to the present value? i'd think that the higher the rate of return, the more desirable the proper… read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
286 satisfied customers
What is the journal entry to post the S Corp buyout of
what is the journal entry to post the S Corp buyout of shareholders … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I have question about how to book a journal entry. A
I have question about how to book a journal entry. A shareholder of my company company acquired 250 shares of stock in exchange for a promissory note for $40,625. The note was signed 12/31/16. Assumin… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I set up an LLC with two other partners. We made the mistake
I set up an LLC with two other partners. We made the mistake of not filing as an S Corp. We then made the mistake of putting ourselves on payroll as we work in the business. What do we do now? We don'… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have a question about 5472 forms, Do I need to file 5472
Do I need to file 5472 forms if the total transaction amounts are below $2000? … read more
taxmanrog
taxmanrog
Master\u0027s Degree
768 satisfied customers
Bob has a friend who's willing to help him out and invest in
Bob has a friend who's willing to help him out and invest in a company that Bob will start. Bob is putting in sweat. He'd prefer that friend doesn't have rights, and has the lowest percentage s-alloca… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
My question is a little complicated.. my company offered
My question is a little complicated.. my company offered incentive stock options which vest over a 4 year period.. they recently converted from an llc to a corporation and offered us options on our ve… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
685 satisfied customers
We have a brand new startup that's been in operation for
We have a brand new startup that's been in operation for about a year. We are pre-revenue which means we have not really made any money yet. How do we calculate our fair market value when it comes to … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x