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

ROA = 0.12

so correct option is d

Step-by-step 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 = (Net\ income)/(Total\ assets)`

Net income = total revenue - expenses

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

So,
`ROA = (1500000)/(12500000)`

ROA = 0.12

so correct option is d