Last Year Mocha Java, Inc

question 43

Multiple Choice

Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java's total assets?

• A) $0.125m.
• B) $1.25m.
• C) $12.5m.
• D) $12m.

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Definitions:

Acquisition

The process of obtaining ownership or control of another company or business entity.

Deferred Tax Liability

It's a tax obligation that arises from income already earned and recorded for accounting purposes, but payment is deferred to the IRS until a future date.

Subsidiary

An entity that is controlled by a higher entity, usually through majority shareholding, and is included in the financial statements of the controlling entity through consolidation.

Investment

The allocation of resources, usually financial, in expectation of a future return or profit.