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Freedom Corporation reported beginning and ending total assets of $ 36 comma 000 and $ 32 comma 000​, respectively. Its net sales for the year were $ 32 comma 300. What was Freedom​'s asset turnover​ ratio? A. 0.95 B. 1.05 C. 0.90 D. 1.01

Respuesta :

Answer:

asset turnover​ ratio = 0.95

so correct option is  A. 0.95

Explanation:

given data

beginning total assets = $36000

ending total assets =  $32000

net sales = $32300

to find out

Freedom​'s asset turnover​ ratio

solution

we find here  Asset turnover ratio that is express as

asset turnover​ ratio = Net sales ÷ average assets     ................1

here Average asset is

average asset = [tex]\frac{beginning\ assets+ ending\ assets}{2}[/tex]

average asset = [tex]\frac{36000+32000}{2}[/tex]

average asset = $34000

so put here value in equation 1

asset turnover​ ratio = [tex]\frac{32300}{34000}[/tex]

asset turnover​ ratio = 0.95

so correct option is  A. 0.95

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