In Computing the Return on Average Investment of a Particular

question 2

Multiple Choice

In computing the return on average investment of a particular asset,the asset's annual depreciation expense may be viewed as:

• A)An increase in the average amount invested over the life of the asset.
• B)An increase in the asset's carrying value each year.
• C)A recovery of the amount originally invested in the asset.
• D)A decrease in the asset's net cash flows.

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