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.

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