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riadik2000 [5.3K]
4 years ago
8

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year, respecti

vely. Sales revenues are $800,000, net income is $100,000, and net cash flows from operating activities are $150,000. What is Computer World’s cash return on assets?
Business
1 answer:
NikAS [45]4 years ago
5 0

Answer:

37.5%

Explanation:

In this question, we are asked to calculate the Value of the cash return on asset

We use a mathematical representation to do this. Let’s get the formula.

Mathematically:

Cash return on assets = operating cash flows/average total assets

According to the question, the operating cash flow has a value of $150,000. The average total assists have a value of (350,000+450,000)/2 = 800,000/2 = $400,000

We input these values into the formula:

Cash return on assets = 150,000/400,000 = 37.5%

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