PE 17-9A Rate earned on total assets

A company reports the following income statement and balance sheet information for the current year:

Net income $   250,000
Interest expense 100,000
Average total assets 2,500,000

Determine the rate earned on total assets.

Answer:

Rate Earned on Total Assets   = 
Net Income + Interest Expense 
Rate Earned on Total Assets   = 
Rate Earned on Total Assets   = 

$250,000 + $100,000 
$2,500,000 

$2,500,000 
Rate Earned on Total Assets   =  14.0%