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22 January, 13:10

Assume MetAmbit Corporation had a net income of $ 2,300 for the year ending December 2016. Its beginning and ending total assets were $ 34,500 and $ 18,500 , respectively. Calculate MetAmbit's return on assets (ROA). (Round your percentage answer to two decimal places.)

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  1. 22 January, 13:14
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    The return on asset is 8.67%

    Explanation:

    The formula to compute the return on assets is shown below:

    Return on assets = Net income : average total assets

    where,

    Net income is $2,300

    And, the average total assets is computed by

    = (Opening balance of total assets + ending balance of total assets) : 2

    = ($34,500 + $18,500) : 2

    = $53,000 : 2

    = $26,500

    Now put the values to the above formula

    So, the ratio would equal to

    = $2,300 : $26,500

    = 8.67%
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