When calculating the return on total assets,the after-tax effect of interest expense must be subtracted from net income.

Name: When calculating the return on total assets,the after-tax effect of interest expense must be subtracted from net income.
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When calculating the return on total assets (ROTA), the formula typically adds interest expense back to net income (after adjusting for taxes) because ROTA aims to measure the profitability of all assets, regardless of financing structure.

When Calculating the Return on Total Assets,the After-Tax Effect of Interest