Which of the following statements is/are correct?
A) Invested capital is the assets that an investment centre has available to generate profit.
B) When evaluating an investment centre, only the profit is important.
C) Return on investment focuses on how effectively each investment centre has used its investment capital.
D) Invested capital represents the assets that an investment centre has available to generate profit AND return on investment focuses on how effectively each investment centre has used its investment capital.

Question

Quizplus · Accepted Answer

Option D is correct as it combines the definition of invested capital and return on investment, both of which are important factors to consider when evaluating an investment centre. Option A is only a partial definition of an investment centre, as it does not take into account the profitability of those assets. Option B is incorrect because profit alone does not provide a complete picture of an investment centre's performance, and Option C is only half correct as it addresses return on investment but does not provide a definition of invested capital.

Which of the Following Statements Is/are Correct