Profit Before Finance Costs Is Used in Calculating Return on Total

question 5

Multiple Choice

Profit before finance costs is used in calculating return on total assets because:

• A) interest rates are hard to predict.
• B) it is simpler to calculate than profit after deducting finance costs.
• C) the efficient use of resources should be examined independently of the method of financing.
• D) interest is a tax deduction for a company.

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