In Determining the Dollar Amount to Use for Operating Assets

question 54

Multiple Choice

In determining the dollar amount to use for operating assets in the return on investment (ROI) calculation, companies will generally use either net book value or gross cost of the assets. Which of the following is not an argument for the use of net book value rather than gross cost?

• A) It is consistent with how assets are reported on the balance sheet.
• B) It eliminates the depreciation method as a factor in ROI calculations.
• C) It encourages the replacement of old, worn-out equipment.
• D) It will result in a decrease of ROI each year.

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Definitions:

Empathetic

Having the ability to understand and share the feelings of another person, showing empathy.

Androcentric

A perspective or approach that prioritizes male experiences and perspectives, often at the expense of female voices and viewpoints.

Covert Research

Research that is conducted without the explicit knowledge or consent of the subjects being studied, often used in situations where obtaining such consent is impractical or could bias the results.

Semi-Covert Research

A methodological approach in research where some aspects of the study are kept hidden from participants or subjects, but not to the extent of fully covert operations.