Difference between historical cost and net book value

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Reference no: EM131202481

1. The difference between the historical cost and the net book value (NBV) of a plant asset is the:

a. Residual value of the asset.

b. Depreciation expense for the current period.

c. An estimate of the remaining useful life of the asset.

d. Accumulated depreciation expense on the asset.

e. Estimated replacement cost of the asset.

2. The use of replacement cost of assets for purposes of calculating return on investment (ROI) has the advantage of:

a. Historical accuracy.

b. Being a relevant measure of the level of investment in a continuing business.

c. Objectivity.

d. Consistency with generally accepted accounting principles (GAAP).

e. Avoiding the need for developing estimates of current cost.

Reference no: EM131202481

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