The net marketing contribution for Doldrum Inc.is $600 million and its total assets are worth $2 billion.The other expenses,including interest and taxes,amount to $400 million.Calculate the company's return on assets.
A)5%
B)10%
C)15%
D)20%
E)25%

Question

Quizplus · Accepted Answer

The Return on Assets (ROA) is calculated as (Net Income / Total Assets) * 100. Here, Net Income is the net marketing contribution minus other expenses, i.e., $600 million - $400 million = $200 million. Total assets are $2 billion. Therefore, ROA = ($200 million / $2 billion) * 100 = 10%.

The Net Marketing Contribution for Doldrum Inc