A company has net income of $250,000, net sales of $2,000,000, and average total assets of $1,500,000. Its return on total assets equals:

Question

Quizplus · Accepted Answer

Return on total assets is calculated by dividing net income by average total assets.

Return on total assets = Net income / Average total assets
                           = $250,000 / $1,500,000
                           = 0.1667 or 16.67%

Therefore, the correct answer is option D, which is 16.7%.

A Company Has Net Income of $250,000, Net Sales of $2,000,000