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D) In general, calculating ROI based on the net book value of assets gives managers an incentive to continue using old, outdated equipment because its low net book value results in a higher ROI.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:

Crust

The outermost solid shell of a rocky planet, Earth in particular, which is chemically and mechanically distinct from the mantle below.

Mantle

The thick layer of the Earth located between the crust above and the outer core below, characterized by its solid yet plastic-like flow.

Refracted Wave

A wave that changes direction and speed as it passes from one medium to another due to differences in densities.

Material

Any substance or matter used in manufacturing, construction, or composition of something else.