Determine the dollar amount of net profit for a venture with the following financial information: revenues = $500,000; return on assets = 20%; and asset turnover = 2.00 times.
A) $10,000
B) $25,000
C) $50,000
D) $60,000
E) $75,000

Question

Quizplus · Accepted Answer

Net profit can be calculated using the formula: Net Profit = Revenues * Return on Assets / Asset Turnover. Here, Net Profit = $500,000 * 20% / 2 = $50,000.

Determine the Dollar Amount of Net Profit for a Venture