In computing the rate earned on total assets,interest expense is added to net income before dividing by average total assets.

Name: In computing the rate earned on total assets,interest expense is added to net income before dividing by average total assets.
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Interest expense is a component of net income and is therefore added back to it in order to compute the rate earned on total assets. The resulting figure is then divided by average total assets to calculate the return on assets ratio.

In Computing the Rate Earned on Total Assets,interest Expense Is