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12 January, 01:39

Oahu Industries' average total assets for the year are $4,000,000, its average total stockholders' equity for the year are $3,000,000, its net income is $800,000, its gross margin is $2,000,000, and its net sales are $10,000,000. What is Oahu's return on assets? Group of answer choices

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  1. 12 January, 03:17
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    20%

    Explanation:

    Return on assets is a profitability ratio that shows how much in net income a company is able to generate from its assets.

    It is a financial measure that shows the net profit a company is able to generate per $1 invested in assets.

    Mathematically,

    Return on asset = net income/average total asset

    = $800,000/$4,000,000

    = 0.2

    = 20%

    This means that the company's management is a to generate a net income of 20 cents for every $1 invested in assets.
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