The net income of firm = $986
Simplifying the given :
Net income = Equity percent × total equity
= 17 % × $5,800
= $98,600 %
= $986
Return on equity :
Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity. ROE is a gauge of a corporation's profitability and how efficiently it generates those profits. The higher the ROE, the better a company is at converting its equity financing into profits.
What is a profit margin?
Profit margin is the measure of your business's profitability. It is expressed as a percentage and measures how much of every dollar in sales or services that your company keeps from its earnings. Profit margin represents the company's net income when it's divided by the net sales or revenue.
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