When Calculating the Rate of Return on Total Assets the Interest

question 46

Multiple Choice

When calculating the rate of return on total assets the interest is added back to profit before tax:

• A) because it must be paid regardless of profits.
• B) because interest rates are variable over time.
• C) to indicate to lenders that some risk is involved.
• D) to reflect the fact that the efficient use of resources should be examined independently from the method of financing.

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Definitions:

Treble Damages

A form of punitive damage awarded in a legal proceeding, where the damages are tripled as a deterrent to wrongful conduct.

Patent Infringement

The unauthorized use, sale, or manufacturing of a patent-protected invention without permission.

Injunctive Relief

A court-ordered act or prohibition against certain actions that could cause irreparable harm, used as a remedy in legal disputes.

Berne Convention

An international agreement that establishes basic principles for protecting copyright of works across all signatory countries.