Refer to this chapter’s opening feature about Million Dollar Home Page. Assume that Alex Tew decides to open a new Website to meet customer demand. This new company will be called Million Dollar Website.

Required 

1. Million Dollar Website obtains a \($500,000\) loan and Alex contributes \($250,000\) of his own assets in the new company.

a. What is the new company’s total amount of liabilities plus equity?

b. What is the new company’s total amount of assets?
2. If the new company earns \($80,000\) in net income in the first year of operation, compute its return on assets (assume average assets equal \($750,000.\) Assess its performance if competitors average an 8% return