What effect does depreciation have on the calculation of the rate of return on total assets?
A)affects both the numerator and denominator
B)no effect
C)increases the outcome
D)decreases the outcome

Question

Quizplus · Accepted Answer

Depreciation affects the rate of return on total assets by reducing net income (numerator) and decreasing total assets (denominator) over time, thus impacting the calculation.

What Effect Does Depreciation Have on the Calculation of the Rate