The Numerator of the Rate Earned on Total Assets Ratio

question 37

Multiple Choice

The numerator of the rate earned on total assets ratio is

• A) net income
• B) net income plus tax expense
• C) net income plus interest expense
• D) net income minus preferred dividends

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Definitions:

Discount Rate

It refers to the discount rate applied in discounted cash flow analysis to calculate the current value of future cash flows.

Investment in Equipment

Capital expenditure on physical assets like machinery and equipment intended to be used in the production of goods or services.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in consistent annual amounts.

Remodelling

The process of updating or altering the structure, layout, or appearance of an existing building or space.