1. Which one of the following statement regarding net income is correct?

A.Net income equals earnings before interest and taxes

B.Net income equals the change in cash flow during the period

C.Net income equals the cash flow from operations during the period

D.Net income does not equal cash flow from assets

E. Net income equals the change in net working capital during the period

2. XZY Cars LLC has sales of $1,000,000, total assets of $3,000,000, and a profit margin of 0.5.

The firm has a total debt-to-total assets ratio of 50 percent. What is the return on equity (ROE)?

A. 0.3

B. 0.6

C. 1.2

D. 0.4

E. 0.5