Business Finance
Financial Problems Help

Question Description

Based on the following information, if managers want to earn a 12% ROA, how much profit must the company generate?

 

Non-current assets

$ 1,260,000

Final Answer

ROA= annual net income/average total assets

Average total assets =( total assets at the beginning of year + total assets at the end of the year)/2

                                   = 1260000/2= 630000

12%=annual net income/630000

Annual net income= 630000*12/100

Annual net income=$75,600


whgrab (11415)
University of Maryland

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