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Use the following balance sheet and income statement shown to answer the question below. Balance Sheet ( Millions of $ ) Assets 2 0 1

Use the following balance sheet and income statement shown to answer the question below.
Balance Sheet (Millions of $)
Assets
2014
Cash and securities
$ 2,500
Accounts receivable
11,500
Inventories
16,000
Total current assets
$30,000
Net plant and equipment
$20,000
Total assets
$50,000
Liabilities and Equity
Accounts payable
$ 9,500
Accruals
5,500
Notes payable
7,000
Total current liabilities
$22,000
Long-term bonds
$15,000
Total liabilities
$37,000
Common stock
$ 2,000
Retained earnings
11,000
Total common equity
$13,000
Total liabilities and equity
$50,000
Income Statement (Millions of $)
2014
Net sales
$87,500
Operating costs except depreciation
81,813
Depreciation
1,531
Earnings bef interest and taxes (EBIT)
$ 4,156
Less interest
1,375
Earnings before taxes (EBT)
$ 2,781
Taxes
973
Net income
$ 1,808
Other data:
Shares outstanding (millions)
500.00
Common dividends
$632.73
Int rate on notes payable & L-T bonds
6.25%
Federal plus state income tax rate
35%
Year-end stock price
$43.39
What is the firm's ROA?
Group of answer choices
6.54%
4.89%
5.29%
3.62%

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