A company has a profit margin of 15 percent on sales of $32,000,000. If the company has total assets of $38,400,000, and an after-tax interest cost on total debt of 4.5 percent, what is the company's ROA? (a) 10.2% (b) 12.5% (c) 15.0% (d) 17.3% (e) 18.9%

A company has a profit margin of 15 percent on sales of $32,000,000. If the company has total assets of $38,400,000, and an after-tax interest cost on total debt of 4.5 percent, what is the company's ROA? (a) 10.2% (b) 12.5% (c) 15.0% (d) 17.3% (e) 18.9%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9MC: A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the companys...

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Question

How can I solve this financial accounting problem using the appropriate financial process?

A company has a profit margin of 15 percent on sales
of $32,000,000. If the company has total assets of
$38,400,000, and an after-tax interest cost on total
debt of 4.5 percent, what is the company's ROA?
(a) 10.2%
(b) 12.5%
(c) 15.0%
(d) 17.3%
(e) 18.9%

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