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Profit Before Finance Costs Is Used in Calculating Return on Total

Question 33

Multiple Choice

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


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

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