All business units are created with certain goals against which they are measured. Regardless of the type of business unit, evaluations are utilized to ensure that management is directing the team towards the achievement of goals that are congruent with the overall company goals set forth by the highest levels of management. Which of the following best represent metrics used to evaluate an investment center?
A) Profit Margin, Investment Turnover, Year-to-Date Expenditures
B) Residual Income, Sales Order per Customer, Profit Margin
C) Return on Investment, Residual Income, Investment Turnover
D) Return on Investment, Target Profit, Economic Value Added

Question

Quizplus · Accepted Answer

This question requires familiarity with the evaluation of various responsibility centers. Choice C is the only choice of the four options that represent metrics that would be used to evaluate an investment center. The other choices are a mixture of metrics used to evaluate an investment center or other types of responsibility centers.

All Business Units Are Created with Certain Goals Against Which