QUESTION 34 The financial statements of Tennessee Tractor Company are given belo

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QUESTION 34 The financial statements of Tennessee Tractor Company are given belo Tennessee Tractor Company Income Statement (2007) Sales Cost of goods sold Gross profit Selling and administrative Operating profit Interest expenses Income before tax Tax expense Net income S8,000,000 5,260,000 2,740,000 expenses 1,500,000 1,240,000 140,000 1,100,000 440,000 S660,000 Balance Sheet Cash Accounts receivable Inventory Total current assets Fixed assets Total assets 2007 S 200,000 1,200,000 1.840,000 3,240,000 3,200,000 $6,440,000 Accounts payable Bank loarn Total current liabilities Bonds payable Total liabilities Common stock (130,000 shares) Retained earnings Total liabilities & equity 800,000 600,000 1,400,000 900,000 2,300,000 300,000 3.840,000 $6,440,000 Note: The common shares are trading in the stock market for $40 each. The firm's net return onassets ratio for 2007 O 10.25 01.6 percent 4.0 15.0 15.6 QUESTION 35 Portfolio Frontier

Explanation / Answer

Net return on assets= net income/total assets *100

Net return on assets= 660,000/ 6,440,000 *100= 10.25%

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