Which of the Following Would Be an Argument for the Use

question 82

Multiple Choice

Which of the following would be an argument for the use of net book value in the computation of operating assets in return on investment calculations?

• A)It allows the manager to replace old, worn-out equipment with a minimum adverse impact on ROI.
• B)It allows ROI to decrease over time as assets get older.
• C)It is consistent with how plant and equipment items are reported on the balance sheet.
• D)It eliminates both age of equipment and method of depreciation as factors in ROI computations.

---

Definitions:

Test of Independence

An analytical method designed to assess if a significant link exists between two categorical variables.

McNemar Test

A method of statistical examination for paired nominal data aimed at evaluating the equality of marginal frequencies across rows and columns.

Nonparametric Statistics

Statistical methods that do not assume a particular distribution of the data and are used especially for data that is not normally distributed.

Small Sample Sizes

This term relates to studies or experiments that involve a limited number of observations or data points, which can affect the reliability and generalizability of the results.