In the calculation of ROI, the most common measure for average operating assets is
A)ending balance.
B)the fair value amounts.
C)the appraised balance.
D)average of the assets during the year.

Question

Quizplus · Accepted Answer

In the calculation of ROI, the most common measure for average operating assets is the average of the assets during the year. This is calculated by taking the sum of the beginning and ending asset balances and dividing by two. This measure gives a more accurate representation of the assets used during the period and helps to eliminate distortions that may occur if only the beginning or ending balance is used.

In the Calculation of ROI, the Most Common Measure for Average