Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment computations? Multiple Choice It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on ROI. It is consistent with the balance sheet presentation of plant and equipment. It eliminates the age of equipment as a factor in ROI computations. It is consistent with the computation of net operating income, which includes depreciation as an operating expense.

Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment computations? Multiple Choice It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on ROI. It is consistent with the balance sheet presentation of plant and equipment. It eliminates the age of equipment as a factor in ROI computations. It is consistent with the computation of net operating income, which includes depreciation as an operating expense.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 44MCQ: When a Dupont analysis reveals that a company has much higher than average asset turnover and much...

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A decrease in the sales of a current project because of the launching of a new project is A. irrelevant to the investment decision. B. an overhead expense. C. a sunk cost. OD. cannibalization.
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