Which of the Following Is a NOT a Decision That

question 116

Multiple Choice

Which of the following is a NOT a decision that management must make before calculating ROI and RI?

• A)Should nonproductive assets be included in the average total asset calculation?
• B)Should gross book value or net book value of assets be used?
• C)Should a simple average of the beginning and ending total liabilities be used?
• D)Should a short term focus be used?

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Definitions:

Cost Driver

An element that leads to a variation in the expense associated with an action.

Semivariable Cost

Costs that have both fixed and variable components, changing in response to activity level but not directly proportional to it.

Variable Costs

Costs that change in proportion to the level of goods or services produced, including costs for materials and labor directly involved in production.

Total Costs

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.