Refer to the Following Selected Financial Information from Shakley's Incorporated

question 53

Multiple Choice

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's return on total assets for Year 2. $\begin{array}{|l|r|r|}\hline & \text { Year 2 } & \text { Year 1 } \\\hline \text { Net sales } & \$ 478,500 & \$ 426,250 \\\hline \text { Cost of goods sold } & 276,300 & 250,120 \\\hline \text { Interest expense } & 9,700 & 10,700 \\\hline \text { Net income before tax } & 67,250 & 52,680 \\\hline \text { Net income after tax } & 46,050 & 39,900 \\\hline \text { Total assets } & 317,100 & 288,000 \\\hline \text { Total liabilities } & 181,400 & 167,300 \\\hline \text { Total equity } & 135,700 & 120,700 \\\hline\end{array}$

• A)2.6%.
• B)15.2%.
• C)22.2%.
• D)9.6%.
• E)14.5%.

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Definitions:

Risk of Loss

Refers to the chance or possibility that an asset or investment's value will decrease or be irrecoverably damaged or destroyed.

Bulldozer

A heavy and powerful tracked vehicle equipped with a substantial metal plate used to push large quantities of soil, sand, rubble, or other such material during construction or conversion work.

Inexperienced

Lacking experience or knowledge in a particular area or activity.

Voidable Rights

Rights that may be legally nullified or voided under certain conditions, typically at the discretion of one of the parties involved.