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Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation? I. Net book value is consistent with how plant and equipment items are reported on a balance sheet. II. Net book value is consistent with the computation of operating income, which includes amortization as an operating expense. III. Net book value allows ROI to decrease over time as assets get older. Select one: О a. I only. b. I and III only. c. III only. d. I and II only.

Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation? I. Net book value is consistent with how plant and equipment items are reported on a balance sheet. II. Net book value is consistent with the computation of operating income, which includes amortization as an operating expense. III. Net book value allows ROI to decrease over time as assets get older. Select one: О a. I only. b. I and III only. c. III only. d. I and II only.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation? I. Net book value is consistent with how plant and equipment items are reported on a balance sheet. II. Net book value is consistent with the computation of operating income, which includes amortization as an operating expense. III. Net book value allows ROI to decrease over time as assets get older. Select one: О a. I only. b. I and III only. c. III only. d. I and II only.
Transcribed Image Text:Which of the following statements provide(s) an argument in favour of including only a plant's net book value rather than gross book value as part of operating assets in the ROI computation? I. Net book value is consistent with how plant and equipment items are reported on a balance sheet. II. Net book value is consistent with the computation of operating income, which includes amortization as an operating expense. III. Net book value allows ROI to decrease over time as assets get older. Select one: О a. I only. b. I and III only. c. III only. d. I and II only.
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