Question in calculating return on investment roi the use of, Ask an Expert

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Question: In calculating return on investment (ROI), the use of book values of assets-particularly fixed assets-in the ROI denominator

a. is the preferable method.

b. may cause a manager of a division with fully depreciated assets to be reluctant to replace the assets with more costly assets.

c. is required by generally accepted accounting principles.

d. may cause a manager of a division with fully depreciated assets to replace the assets with newer, more efficient, but more costly assets.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92572398

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