Which of the following statements provide(s) an argument in favor of including o

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 and III. b) Only I and II. c) Only III. d) Only I.

Explanation / Answer

Hi, Option 1 and 2 are correct. Thanks,Aman

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