Investment centers need KPIs to evaluate how efficiently the business unit uses assets. Typical KPIs of this type would include all of the following EXCEPT:
A) ROI (Return on investment).
B) EVA (Economic value added).
C) NOI (Net operating income).
D) RI (Residual Income).

Question

Quizplus · Accepted Answer

The given options are all financial performance measures that are commonly used to assess the effectiveness of investment centers. However, NOI is not a typical KPI for investment centers because it only considers operating revenues and expenses, without factoring in the capital invested in the unit. ROI, EVA, and RI all incorporate measures of profitability and asset utilization to evaluate how well an investment center generates returns above the cost of capital.

Investment Centers Need KPIs to Evaluate How Efficiently the Business