Which of the following statements regarding the use of historical costs and current costs to compute return on investment (ROI)is(are)true? (A)Historical costs are based on the original costs to acquire a long-term asset,while current costs represent the costs to replace the long-term asset.(B)For a specific multiple-period project,the return on investment (ROI)computed using current costs will generally be less than the ROI computed using historical costs.
A) Only (A)is true.
B) Only (B)is true.
C) Both (A)and (B)are true.
D) Neither (A)and (B)is true.

Question

Quizplus · Accepted Answer

(A) is true because historical costs refer to the original acquisition costs, while current costs are replacement costs. (B) is true because current costs are typically higher due to inflation, leading to a lower ROI when using current costs compared to historical costs.

Which of the Following Statements Regarding the Use of Historical