Profit Before Finance Costs Is Used in Calculating Return on Total

question 33

Multiple Choice

Profit before finance costs is used in calculating return on total assets because:

• A) the efficient use of resources should be examined independently of the method of financing.
• B) it is simpler to calculate than profit after deducting finance costs.
• C) interest rates are hard to predict.
• D) interest is a tax deduction for a company.

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Definitions:

External Factors

Elements outside an individual or organization that can affect its performance or outcomes, such as economic conditions or competition.

Driving Errors

Mistakes made by drivers while operating a vehicle, often leading to accidents or traffic violations.

Implicit Personality Theory

The assumption that an individual holds about how different qualities of a person are related to each other, shaping perceptions of others based on limited observations.

Perceptual Organization

The process by which the brain structures and interprets sensory information in order to understand the environment.