Which of the Following Is the Correct Formula for Calculating

question 187

Multiple Choice

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

• A) (Net income + Interest expense) / Average total assets
• B) (Net income - Interest expense) / Average total asset
• C) (Net income - Interest expense) / Total assets
• D) Total equity / Total assets

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Definitions:

Business Planning Spectrum

Encompasses the variety of strategic and operational planning activities within a business, from long-term vision setting to short-term action planning.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing its financial leverage.

Strategic Planning

The process of defining a business's strategy or direction and making decisions on allocating its resources to pursue this strategy.

Strategic Planning

The process of defining a company's direction and making decisions on allocating resources to pursue this direction.