Given the Following Financial Data: Net Income/sales = 6%; Sales/total

question 139

Multiple Choice

Given the following financial data: net income/sales = 6%; sales/total assets = 3.5; debt/total assets = 30%. The return on total assets is:

• A) 15%
• B) 21%
• C) 30%
• D) 36%

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Definitions:

Appraised Value

The estimated monetary value of an asset determined by a professional appraiser at a specific point in time.

Depreciated

Refers to the reduction in the recorded value of an asset over time due to wear and tear, obsolescence, or age.

Equipment

Tangible assets used in operations, such as machinery or office hardware, that play a key role in business operations and productivity.

Allowance for Repairs

A reserve of funds set aside by a company to cover anticipated repair costs for its assets.