Historical cost is widely used for asset valuation in calculating return on investment because ________.
A) it reports the replacement cost of long-term assets
B) it is more subjective than other approaches
C) it requires additional data collection
D) the cost of obtaining additional data exceeds the benefit

Question

Quizplus · Accepted Answer

Historical cost is preferred in calculating return on investment because it is based on the actual cost paid for assets, avoiding the need for additional data collection and analysis that could exceed the benefits of more subjective or current valuation methods.

Historical Cost Is Widely Used for Asset Valuation in Calculating