Given that return on investment measures performance over time, the invested capital would most appropriately be calculated by using:
A) beginning of year assets.
B) average assets.
C) total assets.
D) current assets.

Question

Quizplus · Accepted Answer

Using average assets would provide a more accurate measure of the capital invested over the performance period, as it takes into account any fluctuations in the asset values over time. Beginning of year assets (A) and current assets (D) do not represent the invested capital over the entire period, while total assets (C) may not reflect changes in asset values or additions/removals of assets during the performance period.

Given That Return on Investment Measures Performance Over Time, the Invested