The Numerator of the Rate Earned on Total Assets Ratio

question 61

Multiple Choice

The numerator of the rate earned on total assets ratio is equal to

• 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:

Negotiated Price

The final price agreed upon by both the buyer and the seller after a process of negotiation, which may involve discounts or modifications from the original price.

Decentralized Units

Operational segments of a larger organization that operate semi-independently, often with their own decision-making authority.

Transfer Price

The price charged one decentralized unit by another for the goods or services provided.

DuPont Formula

An expanded expression of return on investment determined by multiplying the profit margin by the investment turnover.