13. Your bank account pays a 5% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT? a. The periodic rate of interest is 5% and the effective rate of interest is also 5%. b. The periodic rate of interest is 1.25% and the effective rate of interest is greater than 5% c. The periodic rate of interest is 5% and the effective rate of interest is greater than 5%. d. The periodic rate of interest is 1.25% and the effective rate of interest is 2.5%. e. The periodic rate of interest is 2.5% and the effective rate of interest is 5%. 11. 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 11.5%. How much net income must be expected to warrant starting the business? (C-3) a. $52,230 b. $54,625 C. $57,873 d. $60,919 e. $64.125