Settles Corporation has provided the following financial data:

Balance Sheet

December $31,$ Year $2$ and Year $1$

Year $2$ Year $1$

Assets

Current assets:

Cash $ $142,000$ $ $110,000$

Accounts receivable, net $104,000120,000$

Inventory $119,000120,000$

Prepaid expenses $37,00040,000$

Total current assets $402,000390,000$

Plant and equipment, net $717,000720,000$

Total assets $ $1,119,000$ $ $1,110,000$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $156,000$ $ $180,000$

Accrued liabilities $84,00070,000$

Notes payable, short term $66,00060,000$

Total current liabilities $306,000310,000$

Bonds payable $250,000250,000$

Total liabilities $556,000560,000$

Stockholders$$ equity:

Common stock, $$4$ par value $240,000240,000$

Additional paid$-$in capital $90,00090,000$

Retained earnings $233,000220,000$

Total stockholders$$ equity $563,000550,000$

Total liabilities & stockholders$$ equity $ $1,119,000$ $ $1,110,000$

Income Statement

For the Year Ended December $31,$ Year $2$

Sales $($all on account$)$ $ $1,360,000$

Cost of goods sold $850,000$

Gross margin $510,000$

Operating expenses $462,692$

Net operating income $47,308$

Interest expense $19,000$

Net income before taxes $28,308$

Income taxes $(35\%)9,908$

Net income $ $18,400$

Dividends on common stock during Year $2$ totaled $$5,400.$ The market price of common stock at the end of Year $2$ was $$5\mathrm{.}89$ per share.

The company$$s return on total assets for Year $2$ is closest to:

Multiple Choice

$2\mathrm{.}76\%$

$1\mathrm{.}64\%$

$1\mathrm{.}65\%$

$2\mathrm{.}75\%$