The net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be ________?
Correct answer: B. 0.0714
- A. 0.0007
- B. 0.0714
- C. 0.05 times
- D. 7.15 times
Explanation
Return on total assets is calculated as 150 ÷ 2,100 = 0.0714, or about 7.14%. The answer is expressed as a decimal rather than a multiple.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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