Question

BC Corporation has net income of $176,000, sales of $1,982,000 and total assets of $2.24m. What is the return on assets?

A) 8%
B) 7.86%
C) 10.67%
D) 11.79%

Answer 1

The return on assets for BC Corporation is calculated by dividing the net income by the total assets and then multiplying by 100 to get a percentage, which results in approximately 7.86%.

Step-by-step explanation:

Step-by-step explanation:

The return on assets (ROA) is a measure of how efficiently a company is using its assets to generate profits. It is calculated by dividing the net income by the total assets. In this case, the net income is $176,000 and the total assets are $2.24 million.

ROA = (Net Income / Total Assets) x 100%

ROA = ($176,000 / $2,240,000) x 100% = 7.86%

Therefore, the correct answer is B) 7.86%.