Question

The advantages of using the current value of assets in the calculation of ROI include ______.

Option 1:
Increased historical accuracy

Option 2:
Better reflection of economic conditions

Option 3:
Reduced transparency

Option 4:
Stable evaluation over time

Answer 1

The Correct option is 2). Using the current asset values for ROI calculations offers a better reflection of economic conditions, aligning the investment's performance with present market trends.

Step-by-step explanation:

The advantages of using the current value of assets in the calculation of Return on Investment (ROI) include a better reflection of economic conditions. This method allows for a more accurate assessment of an investment's performance by considering the present market value of assets rather than their historical cost. When calculating the ROI using current values, it provides a dynamic picture that can align with market fluctuations, presenting a clearer view of potential gains or losses related to current economic trends and asset valuations.