4-8: Potential Misuses of ROE

DuPont and Net Income

Ebersoll Mining has $8 million in sales, its ROE is 12%, and its total assets turnover is 4x. Common equity on the firms balance sheet is 45% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.