Problem:
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 an ROE of 13.5%.
Required:
Question: How much net income must be expected to warrant starting the business?
Note: Please show guided help with steps and answer.