What are the measures of performance for investment centers? How do they work?
What will be an ideal response?
There are two commonly used measures of performance for investment centers: accounting return on investment and residual income. ROA (return on assets) is the ratio of accounting net income generated by the investment center divided by total assets invested in the investment center. Residual income captures business-unit performance by subtracting the opportunity cost of capital employed from the profits of the business unit.
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A welding machine is an example of a factor of production if it is being used to produce automobiles
Indicate whether the statement is true or false
Jack is selling his sweaters for the market price of $40. His average variable costs are $50. In this situation, Jack should do which of the following?
a. Shut down and only lose his fixed cost. b. Shut down and lose his fixed and variable cost. c. Shut down and only lose his variable cost. d. Keep producing and lose some of his variable cost.
If the efficient markets hypothesis is correct, then
a. the number of shares of stock offered for sale exceeds the number of shares of stock that people want to buy. b. the stock market is informationally efficient. c. stock prices never follow a random walk. d. All of the above are correct.
When we speak of capital, we refer primarily to money and financial assets such as bonds and stock.
Answer the following statement true (T) or false (F)