The minimum acceptable divisional income from operations is set by top management by establishing a minimum rate of return considered acceptable for invested assets.

Question

Quizplus · Accepted Answer

This statement is true as top management can set a minimum rate of return as a benchmark to measure the performance of a division and determine the acceptability of its income from operations. This can also encourage managers to focus on maximizing the return on invested assets to meet or exceed the established minimum rate.

The Minimum Acceptable Divisional Income from Operations Is Set by Top