Use the following information to answer questions
Wichita,Inc.had the following amounts on its 12/31/16 financial statements.

-The return on assets ratio for Wichita is:
A)5%.
B)10%.
C)20%.
D)50%.

Question

Use the following information to answer questions 
Wichita,Inc.had the following amounts on its 12/31/16 financial statements.
 
-The return on assets ratio for Wichita is:
A)5%. 
B)10%. 
C)20%. 
D)50%.

Quizplus · Accepted Answer

The return on assets ratio is calculated by dividing net income by total assets. Using the amounts provided:

Net income = $300,000 - $200,000 = $100,000

Total assets = $1,500,000 + $2,000,000 / 2 = $1,750,000

Return on assets ratio = $100,000 / $1,750,000 = 0.057 or 5.7%

Therefore, the correct answer is B) 10%.

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