1) The investor is thinking of starting the new business. Company would need= $475,000 of assets, and it would be financed completely with common stock. Investor will go forward only if she thinks firm can give= 21.5% return on invested capital, which means that firm should have the ROE of= 21.5%. How much net income should be expected to warrant starting business?

2) Heaton Corp. sells on terms which allow customers 45 days to pay for merchandise. Its sales last year were= $475,000, and its year-end receivables were= $65,000. If its DSO is less than 45-day credit period, then customers are paying on time. Or else, they are paying late. By how much are customers paying early or late? Base your answer on this equation: DSO - Credit period days early or late, and use a 365-day year when computing DSO. Positive answer points out late payments, whereas a negative answer points out early payments.