A Fire Has Destroyed a Large Percentage of the Financial

question 45

Multiple Choice

A fire has destroyed a large percentage of the financial records of the Carter Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 18 percent. If sales were $4 million, the debt ratio was 0.40, and total liabilities were $2 million, what was the return on assets (ROA) ?

• A) 10.80%
• B) 0.80%
• C) 1.25%
• D) 12.60%
• E) Insufficient information.

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Definitions:

Investment Portion

The segment of an investment portfolio allocated to various investment vehicles according to a specific strategy.

Death Benefit

A payment made to the beneficiaries of an insurance policy or pension plan when the insured or participant dies.

Insurance Portion

The portion of a payment specifically allocated to cover insurance costs.

Full Retirement Benefit

Full Retirement Benefit refers to the total amount of pension or social security payments a person is eligible to receive upon reaching the designated retirement age.