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21 May, 12:52

Assume Metro Company had a net income of $2,100 for the year ending December 2018. Its beginning and ending total assets were $33,500 and $19,500, respectively. Calculate Metro's return on assets (ROA). (Round your percentage answer to two decimal places.)

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  1. 21 May, 15:33
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    7.92%

    Explanation:

    The computation of the return on total assets is shown below:

    Return on assets = (Net income) : (average of total assets)

    where,

    Net income is $2,100

    Average total assets = (Beginning total assets + ending total assets) : 2

    = ($33,500 + $19,500) : 2

    = $26,500

    Now put these values to the above formula

    So, the ratio would equal to

    = $2,100 : $26,500

    = 7.92%
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