Question

the choice of valuation method for inventories would normally not affect which item(s) used in calculating return on investment (roi)? multiple choice the valuation of fixed assets (e.g., plant, property, and equipment) used by an investment center. the amount of operating income earned by an investment center in a given period. both the investment base and the level of operating income reported by an investment center. the estimated value of current assets of a business entity, such as an investment center. the return on sales (ros) of an investment center for the period.

Answer 1

The choice of valuation method for inventories can impact the amount of operating income earned by an investment center and affect both the investment base and the level of operating income reported. Therefore correct option is B

Step-by-step explanation:

The choice of valuation method for inventories would not normally affect the valuation of fixed assets used by an investment center. The valuation of inventories is separate from the valuation of fixed assets. Valuation methods for inventories, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out), do not impact the valuation of fixed assets like plant, property, and equipment.

However, the choice of valuation method for inventories can affect the amount of operating income earned by an investment center in a given period. Different valuation methods can impact the cost of goods sold and, consequently, the operating income.

The choice of valuation method for inventories also affects both the investment base and the level of operating income reported by an investment center. The value of inventories is a part of the investment base and impacts the calculation of return on investment (ROI). Additionally, the valuation method affects the cost of goods sold, which directly impacts the operating income reported.

Therefore, the correct answer is: Both the investment base and the level of operating income reported by an investment center.