Compute return on assets given net income of $13,764,beginning assets of $120,000,and ending assets of $176,000.
A)4.65%
B)7.82%
C)9.3%
D)11.47%
E)21.51%

Question

Quizplus · Accepted Answer

Return on assets is calculated by dividing net income by average total assets. 
Average total assets = (Beginning assets + Ending assets)/2 = ($120,000 + $176,000)/2 = $148,000 
Return on assets = Net income / Average total assets = $13,764 / $148,000 = 0.093 or 9.3% 
So the best choice is C.

Compute Return on Assets Given Net Income of $13,764,beginning Assets