Chou Co. has a net income of $43,000, assets at the beginning of the year are $250,000 and assets at the end of the year are $300,000. Compute its return on assets.
A) 8.4%.
B) 1.5%.
C) 17.2%.
D) 14.3%.
E) 15.6%.

Question

Quizplus · Accepted Answer

Return on assets is calculated as Net Income divided by Average Total Assets. Average Total Assets = ($250,000 + $300,000) / 2 = $275,000. Return on Assets = $43,000 / $275,000 = 0.156 or 15.6%.

Chou Co Has a Net Income of $43,000, Assets at the the Beginning