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<blockquote data-quote="SlugSlinger" data-source="post: 3117903" data-attributes="member: 7248"><p>Again, words mean things and taking the meaning literally in financial and accounting terms:</p><p></p><p>ROI is a financial metric that measures investments that are intended to provide a return. If you buy the vehicle in hopes of it increasing value, then it is an investment. </p><p></p><p>However if you buy a vehicle in hopes to provide transportation to work so you can make money, then it is an asset or an expense depending how you want to account for the cost. Equipment can be an asset that is depreciated on the balance sheet under PP&E and not an investment that is accounted for on the income statement. You measure performance of assets using ROA and what I see is ROCE. In business, equipment does not go up in book value, it only goes down.</p><p></p><p>Or you can expense equipment (depending on the cost as I believe tax law has changed) and write it off when purchased, this is shown on the income statement under operating expenses.</p><p></p><p>Equipment and investments are 2 totally separate accounts that are not treated or accounted for the same. So using ROI to measure the value of equipment is not logical.</p></blockquote><p></p>
[QUOTE="SlugSlinger, post: 3117903, member: 7248"] Again, words mean things and taking the meaning literally in financial and accounting terms: ROI is a financial metric that measures investments that are intended to provide a return. If you buy the vehicle in hopes of it increasing value, then it is an investment. However if you buy a vehicle in hopes to provide transportation to work so you can make money, then it is an asset or an expense depending how you want to account for the cost. Equipment can be an asset that is depreciated on the balance sheet under PP&E and not an investment that is accounted for on the income statement. You measure performance of assets using ROA and what I see is ROCE. In business, equipment does not go up in book value, it only goes down. Or you can expense equipment (depending on the cost as I believe tax law has changed) and write it off when purchased, this is shown on the income statement under operating expenses. Equipment and investments are 2 totally separate accounts that are not treated or accounted for the same. So using ROI to measure the value of equipment is not logical. [/QUOTE]
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