Final answer:
To calculate Return on Equity (ROE), the adjusted net income, which excludes income from equity investments, should be divided by the average equity. However, with the provided figures and multiple-choice answers, there seems to be a discrepancy, leading to the conclusion that there isn't enough information to answer the question.
Step-by-step explanation:
The student is asking how to calculate Return on Equity (ROE), which is a financial ratio that measures the profitability of a company in relation to the average equity of its shareholders. To calculate ROE, we use the formula ROE = (Net Income - Income from Equity Investments) / Average Equity. So, based on the information provided:
- Net Income: $38,441
- Income from Equity Investments: $9,033
- Average Equity: $123,650
We calculate the adjusted net income by subtracting the income from equity investments from the net income, which gives us $38,441 - $9,033 = $29,408. Then we divide this adjusted net income by the average equity to get the ROE:
ROE = $29,408 / $123,650 = 0.2377 or 23.77%
None of the answer choices matches this calculation, hence the correct answer would be E) There is not enough information to answer the question, implying that there might be a mistake in the figures or answer choices given.