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3 October, 09:33

Neon Light Company has $1,000,000 in assets and $600,000 of debt. It reports a net income of $100,000. What is the return on the assets?

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  1. 3 October, 10:33
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    10%

    Explanation:

    Given that,

    Assets = $1,000,000

    Dept = $600,000

    Net income = $100,000

    Therefore,

    Return on assets = (Net income : Total assets) * 100

    = ($100,000 : $1,000,000) * 100

    = 0.10 * 100

    = 10%

    Hence, the return on assets of Neon Light Company is 10%.
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