A Company Had Assets at the Beginning of the Year

question 51

Multiple Choice

A company had assets at the beginning of the year of $7,750,000 and at the end of the year of $6,750,000.During the year they reported sales of $2,750,000 net income of $275,000.What was their return on investment for the year?

• A)10%
• B)4.0%
• C)3.8%
• D)3.3%

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Definitions:

Net Operating Income

The profit generated from a company's operational activities after subtracting operating expenses from revenue.

Target Profit

The amount of net income that a company aims to achieve within a specific time frame.

Margin of Safety Percentage

The ratio that shows how much sales can decline before a business reaches its break-even point, expressed as a percentage.

Unit Variable Cost

The cost that varies with each unit produced, including materials and labor directly associated with production.