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:

Specially Indorsed

A check or negotiable instrument that has been endorsed (signed on the back) and specifies the person to whom or to whose order the instrument is payable.

Order of Cash

The prioritization or sequence in which cash transactions are processed or recorded.

Order Paper

A negotiable instrument that is payable to a specific person or entity named on the document, requiring endorsement for transfer.

Negotiated

A process where two or more parties discuss terms and conditions to reach a mutual agreement.