Save Question 27 1 point The After Life has sales of 430000

Save Question 27 (1 point) The After Life has sales of $430,000, total assets of $380.000, and a proft margin of 6 percent. What is the return on assets? 1) 5.86 percent 2) 6.32 percent 3) 6.79 percent O 47.21 percent 5) 7.93 percent

Solution

Sales are of $430,000

Profit Margin is of 6%

That means Profit is 6% of Sales ie. 6% of $430,000 ie. $25,800

Total assets are of $380,000

Return on assets is (Profit/Total Assets)*100

Return on assets is (25,800/380,000)*100 ie. 6.78% or 6.79%

The answer is Option 3(6.79 percent)