Determination of the useful life of an asset and choice of a depreciation method will affect all of the following except:
A) The amount of operating income earned by an investment center for any given period.
B) The investment base for purposes of calculating ROI.
C) Amount of depreciation expense recorded for any given period.
D) Net book value (NBV) of an asset as of any point in time.
E) The opportunity cost of lost sales on alternative projects.

Question

Quizplus · Accepted Answer

The determination of the useful life of an asset and choice of a depreciation method will not affect the opportunity cost of lost sales on alternative projects. All other options (A, B, C, and D) will be affected by the choice of useful life and depreciation method.

Determination of the Useful Life of an Asset and Choice