Which of the following is an example of a performance measure that is appropriate for an investment centre but not a profit centre or cost centre?
A) Quality of service
B) Income from operations
C) Rate of return on investment
D) Gross profit margin

Question

Quizplus · Accepted Answer

The rate of return on investment is an appropriate performance measure for an investment centre as it measures the profitability of the investments made by the centre. This measure is not relevant for a profit centre or cost centre as they do not typically make investment decisions. Quality of service is a measure more relevant to a service-focused business and income from operations and gross profit margin are measures more relevant to profit centres and cost centres.

Which of the Following Is an Example of a Performance