Question

A company had $5,000,000 in total revenues for its fiscal year. Its expenses for the year were $3,500,000. Its total assets were $12,500,000. What is the company's return on assets for the fiscal year ?a. 0.70b. 0.40c. 0.28d. 0.12

Answer 1

Answer:

ROA = 0.12

so correct option is d

Explanation:

Given data:

total revenue = $5,000,000

Expenses = $3,500,000

Total assets = $12,500,000

Rate on assets (ROA) is calculated as

$ROA = \frac{Net\ income}{Total\ assets}$

Net income = total revenue - expenses

Net income = $5,000,000 - 3,500,000

So,$ROA = \frac{1500000}{12500000}$

ROA = 0.12

so correct option is d