Mars Corporation Has Provided the Following Data for Year 2

question 51

Multiple Choice

Mars Corporation has provided the following data for Year 2: The company's total stockholders' equity at the end of Year 2 amounted to $1,095,000 and at the end of Year 1 to $1,060,000.The company's return on equity for Year 2 is closest to:

• A)5.91%
• B)7.40%
• C)3.84%
• D)71.20%

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Definitions:

Units-Of-Output

A depreciation method that allocates the cost of an asset based on the number of units it produces.

Straight-Line

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.

Depreciable Cost

The total cost of an asset that is subject to depreciation, which includes the purchase price, import duties, transport costs, installation charges, and other expenses, less its salvage value.

Straight-Line Rate

A method of calculating depreciation expense for an asset, spreading its cost evenly over its estimated useful life.