Return on investment (ROI) is a very popular tool to evaluate performance. The measurement of ROI is dependent, in part, on whether fixed assets are valued at acquisition cost or net book value. List several advantages of acquisition cost and net book value as ways to value long-lived assets.
What will be an ideal response?
Acquisition cost:
· The investment base is not affected by the choice of an arbitrary depreciation method.
· The investment base does not shrink over time because of accumulated depreciation. This avoids misleading increases in ROI or residual income.
Net book value:
· Consistency with the balance sheet is maintained.
· Consistency with the definition of income is maintained, as both the numerator and denominator will reflect depreciation amounts.
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According to the Truth-in-Savings Act, the interest rate that banks are required to report when you deposit money in an account is known as
A. capital-gains yield. B. annual percentage yield. C. current yield. D. total return.
How do the stages in a product's life cycle influence the marketing communications mix?
What will be an ideal response?
Akira purchased a certain number of securities and incurred losses due to a decline in the price of securities in the market. She held her accountant, Jason, liable for her entire loss. Given this information, which of the following statements is true?
A. Akira can hold Jason liable for her losses because he did not prove that he made a reasonable investigation and reasonably believed that the certified financial statements were accurate. B. Jason cannot be held liable because the losses were totally unrelated to the accountant's negligence. C. Akira can hold Jason liable for her losses because an accountant is liable to any purchaser of securities issued pursuant to a defective registration statement. D. Jason can be held liable because he did not demonstrate that the purchaser was aware of the omissions in the registration statement before buying the securities.
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Indicate whether this statement is true or false.