Profit is $109 000,after deducting interest of $11 000 and average total assets are $650 000.Return on assets to assess profitability from a management view point is:
A)18.5%
B)16.8%
C)15%
D)168%

Question

Quizplus · Accepted Answer

Return on assets (ROA) = (Profit + Interest) / Average Total Assets
= ($109,000 + $11,000) / $650,000
= $120,000 / $650,000
= 0.1846 or 18.5%
Therefore, the best choice is A) 18.5% because it accurately calculates the return on assets.

Profit Is $109 000,after Deducting Interest of $11 000 and Average