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return on total assets

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The total assets of the ABC Company on January 1, 19x9 were $2.3 million and on December 31, 19x9 were $2.5 million. Net income for 19x9 was $188,000. Dividends for 19x9 totaled $75,000, interest expenses totaled $70,000, and the tax rate was 30%. The return on total assets for 19x9 was closest to:
A) 9.5%.
B) 6.8%.
C) 9.9%.
D) 10.8%.

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Solution Summary

The return on total assets are examined. Interest expense total assets are analyzed.

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Please see the attached file.

Net Income 188,000
Dividends 75,000
Interest 70,000
Taxes 56,400
EBIT 239,400

Total Assets
Beginning of Year 2,300,000
End of Year 2,500,000
Average 2,400,000

ROA 9.98%

Background info on ROA:

A ratio that measures a company's earnings before ...

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