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16 June, 03:04

Assume metro corporation had a net income of $ 2 comma 400 for the year ending december 2018. its beginning and ending total assets were $ 30 comma 500 and $ 20 comma 000 , respectively. calculate metro's return on assets (roa). (round your percentage answer to two decimal places.)

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  1. 16 June, 05:43
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    We have:

    Net Income = 2,400

    Beginning total assets = 30,500

    Ending total assets = 20,000

    Return on asset is net income divided by average total assets.

    Average total assets = (beginning total assets + ending total assets) / 2

    = (30500 + 20000) / 2

    = 25,250

    Return on asset = net income / average total assets

    = 2400 / 25250

    =9.50%

    Therefore, Return on asset would be 9.50%.
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