A firm will see a difference in the return on investment amount depending if they use historical cost or current cost valuation methods for the assets.

Question

Quizplus · Accepted Answer

The return on investment amount can differ depending on the valuation method used, as historical cost values assets at their original purchase price while current cost adjusts the value based on current market values. Depending on market fluctuations, the return on investment calculated using the two methods could be significantly different.

A Firm Will See a Difference in the Return on Investment