Based on the partial balance sheet of Marco Investments, Inc., compute the rate
ID: 2493101 • Letter: B
Question
Based on the partial balance sheet of Marco Investments, Inc., compute the rate of return on total assets. (Round your answer to two decimal places.)
Total Assets, December 31, 2017
$ 197,000
Total Assets, December 31, 2016
$ 143,000
For Year Ended December 31, 2017:
Interest Expense
$ 10,000
Net Income
$ 18,000
A.16.47%
B.9.14%
C.4.71%
D.8.24%
Total Assets, December 31, 2017
$ 197,000
Total Assets, December 31, 2016
$ 143,000
For Year Ended December 31, 2017:
Interest Expense
$ 10,000
Net Income
$ 18,000
Explanation / Answer
the rate of return on total assets = Earning before interest / Average Total Assets
= ( 18000 + 10000 ) / (143000 + 197000 /2)
= 28000 / 170000 = 16.47% (OPTION A)