FastLane Has Net Income of $18,955, and Assets at the Beginning

question 53

Multiple Choice

FastLane has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

• A) 7.7%.
• B) 8.5%.
• C) 9.5%.
• D) 11.8%.
• E) 13.0%.

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Definitions:

Straight-Line Depreciation

An approach to evenly spread the expense of an asset over its period of utility.

Working Capital

The gap between a firm's present assets and liabilities, showing its operational efficiency and ability to cover short-term obligations.

Operating Cash Inflow

Cash generated from a company's normal business operations.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making it the simplest depreciation method.