Which of the Following Statements Provide(s)an Argument in Favour of Including

question 1

Multiple Choice

Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation?
I.Net book value is consistent with how plant and equipment items are reported on a balance sheet.
II.Net book value is consistent with the computation of operating income,which includes amortization as an operating expense.
III.Net book value allows ROI to decrease over time as assets get older.

• A) I only.
• B) III only.
• C) I and II only.
• D) I and III only.

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Definitions:

Unit Sales

The total number of individual units sold.

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues, but before taxes and interest are deducted.

Units

A measure of quantity, referring to the individual countable items or grouped quantities of a product.

Sales Commissions

Fees paid to salespersons for selling products or services, typically a percentage of the sale amount.