John, the controller at one of the Metropolis Health System hospitals, has used the unadjusted rate of return method when preparing a report submitted to the Executive Committee. The Committee Chairman, who has a reputation as a know-it-all, questions the use of the unadjusted rate of return method. At this point the Vice President of Finance jumps in and says he approves of using this method: first because the information necessary for the computation is obtained from existing financial statements, second because it is one of the recognized methods of evaluating the use of the hospital's money, and third because it is easy to understand. Is the Vice President correct in all three points?