Which of the following would be the best measure of performance for a profit center?
A) Residual income
B) Return on investment (ROI)
C) Segment margin
D) Economic value added (EVA)

Question

Quizplus · Accepted Answer

Segment margin is the best measure of performance for a profit center because it directly reflects the profitability of the center by considering only the revenues and expenses directly attributable to it, which is crucial for evaluating its performance independently of the rest of the company.

Which of the Following Would Be the Best Measure of Performance