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10 August, 08:36

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year, respectively. Sales revenues are $800,000, net income is $100,000, and net cash flows from operating activities are $150,000. What is Computer World's cash return on assets?

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  1. 10 August, 09:09
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    37.5%

    Explanation:

    In this question, we are asked to calculate the Value of the cash return on asset

    We use a mathematical representation to do this. Let's get the formula.

    Mathematically:

    Cash return on assets = operating cash flows/average total assets

    According to the question, the operating cash flow has a value of $150,000. The average total assists have a value of (350,000+450,000) / 2 = 800,000/2 = $400,000

    We input these values into the formula:

    Cash return on assets = 150,000/400,000 = 37.5%
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