The difference between a profit center and an investment center is
A) An investment center is responsible for investments made in operating assets.
B) An investment center provides services to profit centers.
C) An investment center incurs costs, but does not directly generate revenues.
D) An investment center incurs no costs but does generate revenues.
E) There is no difference; investment center and profit center are synonymous.

Question

Quizplus · Accepted Answer

A profit center is responsible for generating revenues and controlling costs to maximize profits. An investment center is responsible for making investments in operating assets and generating returns on those investments. Therefore, the main difference between a profit center and an investment center is that the latter is responsible for investing capital, whereas the former is responsible for generating profits by managing operating costs and revenues.

The Difference Between a Profit Center and an Investment Center