A Fire Has Destroyed a Large Percentage of the Financial

Multiple Choice

A fire has destroyed a large percentage of the financial records of the Carter Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 18 percent. If sales were $4 million, the debt ratio was 0.40, and total liabilities were $2 million, what was the return on assets (ROA) ?

A) 10.80%
B) 0.80%
C) 1.25%
D) 12.60%
E) Insufficient information.