Using the Following Data for Stevenson Industries Compute the Return

question 35

Multiple Choice

Using the following data for Stevenson Industries compute the return on assets. $\begin{array}{lr}\text { Net Income } & \$ 180,000 \\\text { Total Assets } 12 / 31 / 22 & 2,410,000 \\\text { Total Assets } 12 / 31 / 21 & 1,980,000 \\\text { Net Sales } & 250,000\end{array}$

• A)7.5%
• B)10.4%
• C)8.2%
• D)11.4%

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Definitions:

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogenous product.

Cost Data

Details about the costs associated with creating a product or service, such as the expenses for materials, workforce, and indirect costs.

Purely Competitive Producer

A producer in a market structure characterized by many small firms, homogeneous products, and free entry and exit, leading to zero economic profit in the long run.

Economic Profit

The differential amount left after subtracting all types of costs, both seen and unseen, from the total income.