Which of the Following Formulae Is Used to Calculate Average

question 122

Multiple Choice

Which of the following formulae is used to calculate average total assets for the return on assets ratio?

• A) Average total assets = (Beginning total assets + Ending total assets) × 2
• B) Average total assets = (Beginning total assets - Ending total assets) × 2
• C) Average total assets = (Beginning total assets - Ending total assets) / 2
• D) Average total assets = (Beginning total assets + Ending total assets) / 2

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Definitions:

Maximum Loan

The highest amount of money that a lender is willing to lend to a borrower, determined by factors such as creditworthiness and collateral.

Life Policy

A contract with an insurance company that pays out a sum of money either on the death of the insured person or after a set period.

Insured

For life insurance, the person whose life is being insured; for other types of insurance, the person who receives the benefit of the insurance.

Semiannual Premiums

Insurance payments made twice a year as part of an insurance policy's terms.