Which of the following statements provide(s)an argument in favor 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 net operating income,which includes depreciation as an operating expense.
III.Net book value allows ROI to decrease over time as assets get older.
A)Only I.
B)Only III.
C)Only I and II.
D)Only I and III.

Question

Which of the following statements provide(s)an argument in favor 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 net operating income,which includes depreciation as an operating expense.
III.Net book value allows ROI to decrease over time as assets get older.
A)Only I.
B)Only III.
C)Only I and II.
D)Only I and III.

Quizplus · Accepted Answer

Net book value aligns with balance sheet reporting and net operating income calculations, which include depreciation.

Which of the Following Statements Provide(s)an Argument in Favor of Including