Use the Following Information for ECE Incorporated

question 48

Multiple Choice

Use the following information for ECE incorporated:

-If ECE's return on assets (ROA) is 12%,then ECE's net income is:

• A)$6 million.
• B)$12 million.
• C)$22 million.
• D)$36 million.

---

Definitions:

Investments

Assets or items acquired with the goal of generating income or appreciating in value over time.

Indirect Method

A way of calculating cash flows for operational activities in the cash flow statement by starting with net income and adjusting for non-cash transactions.

Cash Flows

The total amount of money being transferred in and out of a business, especially affecting liquidity.

Operating Activities

Activities that relate directly to the primary operations of a company, such as manufacturing, distributing, marketing, and selling a product or service.