The historical cost of an asset less its accumulated depreciation is:
A) Net book value (NBV).
B) Return on equity (ROE).
C) Return on investment (ROI).
D) A rough measure of current replacement cost of the asset.
E) An estimate of liquidation value of the asset.

Question

Quizplus · Accepted Answer

Net book value (NBV) is calculated as the historical cost of an asset less its accumulated depreciation. It reflects the asset's current book value on the balance sheet. ROE and ROI are financial metrics that are unrelated to the calculation of NBV. D and E are not accurate descriptions of NBV.

The Historical Cost of an Asset Less Its Accumulated Depreciation