What Effect Does Depreciation Have on the Calculation of the Rate

question 14

Multiple Choice

What effect does depreciation have on the calculation of the rate of return on total assets?

• A)affects both the numerator and denominator
• B)no effect
• C)increases the outcome
• D)decreases the outcome

---

Definitions:

Accounts Payable Balance

The total amount owed by a company to its suppliers or creditors for items or services purchased on credit.

Raw Materials Purchases

The total cost or expenditure associated with buying raw materials that will be used in producing goods.

Estimated Direct Labor Cost

The forecasted cost associated with the labor directly involved in the manufacturing of goods.

Budgeted Required Production

The estimated amount of goods or services that a business plans to produce in a specific period, as determined by budgeting processes.