Question:In computing the rate of return on assets, interest expense net of income tax savings is added to net income. Assume that XYZ Company has interest expense of $20 million and net income of $50 million. Assume that the income tax rate is 40 percent. In computing the rate of return on assets, what would the numerator be?
A $38 million
B $42 million
C $58 million
D $62 million
+ AnswerB
+ Explanation
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