At the End of December 2014, Young Company Had Total

question 27

Multiple Choice

At the end of December 2014, Young Company had total assets of $1,500,000.A review of the company's income statement showed that net income and interest expense for the year were $200,000 and $18,000, respectively.If the company's average tax rate is 25%, their return-on-assets for the year was closest to?

• A)11.2%
• B)12.1%
• C)13.3%
• D)14.2%

---

Definitions:

Tying Arrangement

An illegal agreement in which the sale of one product is tied to the sale of another.

Cross-Licensing Agreement

An arrangement where two or more parties grant each other rights to intellectual property, often to use patents without suing for infringement.

Legal Tying

Refers to a potentially prohibited practice where a seller requires the purchase of an unwanted item or service in order to buy the desired item.

Fee Simple Absolute

The highest and most complete form of property ownership, granting the owner unlimited rights to the property.