Question

QUESTION 10

Branch Corp.'s total assets at the end of last year were $315,000 and its net income after taxes was $22,750. What was its return on total assets?
a.
7.22%
b.
8.78%
c.
7.96%
d.
8.36%
e.
7.58%

Answer 1

Answer:

a. 7.22%

Explanation:

The computation of the return on total assets is shown below:

= Net income after taxes ÷ total assets at the end of the last year

= $22,750 ÷ $315,000 × 100

= 7.22%

Hence, the return on total assets is 7.22%

Therefore the correct option is a.