At the end of December 2014, Young Company had total assets of $1,500,000.A review of the company's income statement showed that net income and interest expense for the year were $200,000 and $18,000, respectively.If the company's average tax rate is 25%, their return-on-assets for the year was closest to?

Question

Quizplus · Accepted Answer

The return-on-assets formula is (Net Income + Interest Expense(1-tax rate))/Total Assets. Plugging in the given values, we get:

($200,000 + $18,000(1-0.25))/$1,500,000 = 0.142 or 14.2%.

Therefore, the closest answer choice is D) 14.2%.

At the End of December 2014, Young Company Had Total