Determine the dollar amount of revenues for a venture with the following financial information: net profit = $60,000; assets turnover = 1.5 times; and return on assets 30%.
A) $300,000
B) $500,000
C) $800,000
D) $1,000,000
E) $1,200,000

Question

Quizplus · Accepted Answer

The return on assets (ROA) is calculated as net profit divided by total assets. Given ROA is 30%, we can find total assets as $60,000 / 0.30 = $200,000. With an asset turnover of 1.5 times, revenues are $200,000 * 1.5 = $300,000.

Determine the Dollar Amount of Revenues for a Venture with the Following