PDG Corporation Had a Return on Equity of 18

question 208

Multiple Choice

PDG Corporation had a return on equity of 18%.Beginning and ending shareholders' equity for the corporation were $570,000 and $560,000 respectively.There were 350,000 common shares and no preferred shares outstanding.What was net income for the year?

• A)$101,700
• B)$63,000
• C)$3,138,888.89
• D)$1,944,444.44

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Definitions:

Carrying Costs

The complete expense associated with keeping inventory, encompassing storage fees, insurance, and the cost of missed opportunities.

Safety Stocks

Extra inventory kept to prevent stockouts and ensure adequate supply in the face of demand or supply variability.

Restocking Costs

Expenses associated with replenishing inventory, including purchasing, shipping, and handling costs.

Collection Policy

The set of guidelines a company uses to monitor and manage the collection of accounts receivable or owed debts.