When Using Financial Performance Measures,which of the Following Statements Is

question 124

Multiple Choice

When using financial performance measures,which of the following statements is incorrect?

• A) Most companies use a weighted-average to determine the amount of average inventory.
• B) Average total assets are used for both ROI and RI computations.
• C) The limitations of financial performance measures reinforce the importance of the balanced scorecard.
• D) In general, calculating ROI based on the net book value of assets gives managers an incentive to continue using old, outdated equipment because its low net book value results in a higher ROI.

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Definitions:

Social Trust

The belief in the reliability, truth, ability, or strength of society, forming the foundation of communal relationships and social networks.

Cynicism

An attitude characterized by a general distrust of others' motives.

Evasive

Tending to avoid commitment or self-revelation, especially by responding only indirectly.

Liar

A person who tells falsehoods or deliberately omits truth with the intention to deceive or mislead.