Indicate Whether Each of the Following Statements About Return on Investment

question 121

Short Answer

Indicate whether each of the following statements about return on investment is true or false.
Return on investment for a division is calculated by dividing net income by total assets.______
Using book value as the valuation base for calculating return on investment can distort ROI and cause motivational problems among managers.______
Accounts receivable are not included in operating assets for the purpose of calculating return on investment.______
Return on investment could be calculated based on historical cost or replacement cost for a division's assets.______
Return on investment can be calculated by multiplying margin by turnover.______

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Definitions:

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, drama, or other expressive activities.

Emotional Tension

The psychological stress and discomfort resulting from conflicts, challenges, or unresolved emotional issues.

Frustration-Aggression

A psychological theory proposing that frustration often leads to aggressive behavior, as aggression is seen as a way to release or address the frustration.

Pent-up Anger

Accumulated feelings of anger that have not been expressed and may result in emotional or physical tension.