Cornect 315093d5 1 Chapters 126 Help SaveExit MC Qu 157 Chou

Cornect 315093d5 1 Chapters 1&26 Help Save&Exit; MC Qu. 157 Chou Co. has a net income of... 8 Chou Co. has a net Income of $56,000, assets at the beginning of the year are $263,000 and assets at the end of the year are $313,000. Compute its return on assets ts Mutiple Choice 213%

Solution

1) Return on Assets = Net Income/Average Assets

Return on Assets = $56,000/[($263,000 + $313,000)/2]

Return on Assets = $56,000/$288,000 = 0.194 = 19.4%

2) Revenue increases $19,000