Which of the Following Is the Correct Mathematical Expression for ROCE

question 184

Multiple Choice

Which of the following is the correct mathematical expression for ROCE?

• A) ROCE = EBITDA ´ (1 - T) \(\div\) (Debt + Equity)
• B) ROCE = Net income ´ (1 - T) \(\div\) (Debt + Equity)
• C) ROCE = EBT ´ (1 - T) \(\div\) (Debt + Equity)
• D) ROCE = EBIT ´ (1 - T) \(\div\) (Debt + Equity)

---

Definitions:

Static Planning Budget

A budget based on a single level of output, not adjusted for changes in activity levels.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for better budget-to-actual comparisons.

Favorable Spending Variance

A situation in which actual spending is less than the budgeted or projected amount, indicating cost efficiency.

Actual Cost

The real cost incurred in the production of goods or services, including all direct and indirect expenses.