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12 December, 22:37

Assume Metro Corporation had a net income of $2,400 for the year ending December 2018. Its beginning and ending total assets were $30,000 and $19,000, respectively. Calculate Metro's return on assets (ROA). (Round your percentage answer to two decimal places.)

A. 12.63%

B. 4.9%

C. 8%

D. 9.8%

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  1. 12 December, 22:50
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    9.8%

    Explanation:

    The return on assets ratio (ROA) measures the efficiently in which a business manages its assets to generate profits during a period.

    The formula for calculating Return on assets is as follows.

    return of asset ratio = Net income / Average Total Assets x 100

    For metro corporation:

    net income: $ 2,400

    Average total assets : = $30,000 + $19,000/2

    =$24,500

    ROA = $2400/$24500x100

    =0.098 x100

    =9.8%
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