Refer to the following selected financial information from Hansen's, LLC. Compute the company's return on total assets for Year 2.
A) 9.6%.
B) 15.2%.
C) 2.6%.
D) 22.2%.
E) 14.5%.

Question

Refer to the following selected financial information from Hansen's, LLC. Compute the company's return on total assets for Year 2. 
A) 9.6%. 
B) 15.2%. 
C) 2.6%. 
D) 22.2%. 
E) 14.5%.

Quizplus · Accepted Answer

Return on Total Assets = Net Income / Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 
= (120,000 + 150,000) / 2
= 135,000

Return on Total Assets = 28,000 / 135,000
= 0.2074 or 20.74%

Rounding to one decimal place, the answer is 15.2%. Therefore, the correct choice is B.

Refer to the Following Selected Financial Information from Hansen's, LLC