Which of the Following Would Be an Argument for Using

question 48

Multiple Choice

Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment (ROI) computations?

• A) It is consistent with the computation of net operating income, which includes depreciation as an operating expense.
• B) It is consistent with the balance sheet presentation of plant and equipment.
• C) It eliminates the age of equipment as a factor in return on investment (ROI) computations.
• D) It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on return on investment.

---

Definitions:

Orbicularis Oculi

A facial muscle that encircles the eye socket and is responsible for closing the eyelids.

Orbicularis Oris

A complex of muscles in the lips that encircles the mouth, involved in controlling movements of the mouth and lips.

Frontalis

A facial muscle that lifts the eyebrows and causes wrinkles on the forehead, being part of the occipitofrontalis muscle.

Zygomaticus

A muscle of the face, which draws the angle of the mouth superiorly and posteriorly to allow for smiling.