Which of the Following Is the Correct Formula for Calculating

question 3

Multiple Choice

Which of the following is the correct formula for calculating rate of return on total assets?

• A)Rate of return on total assets = (Net income + Interest expense)/ Average total assets
• B)Rate of return on total assets = (Net income - Interest expense)/ Average total asset.
• C)Rate of return on total assets = (Net income - Interest expense)/ Total assets
• D)Rate of return on total assets = Total equity / Total assets

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Definitions:

Customers Served

The total number of customers that have been provided services or goods by a business during a specific time period.

Flexible Budget

A budget which is modifiable in response to changes in the volume of operations or activity levels.

Variable Cost Estimates

Predictions or calculations regarding the variable costs that will be incurred during a specific period.

Net Operating Income

A company's revenue minus its operating expenses, excluding taxes and interest, representing the profitability of its core business activities.