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Raymond Yates
on Oct 23, 2024

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The profitability of an investment centre can best be evaluated by:

A) the revenues, costs and investment the manager can control.
B) the total capital invested in the organisation and the sizeable amount of return.
C) the profit margin and the investment capital traceable to the investment centre.
D) the divisional contribution margin.

Investment Centre

A business unit or division within an organization that is responsible for its own revenues, expenses, and assets, and is evaluated based on its return on investment.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, used to assess a company's financial health.

Capital Invested

Capital deployed by a business to purchase or improve tangible assets like real estate, factories, or machinery.

  • Understand the principles of performance evaluation and the role of controllable versus non-controllable factors.
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Joaquin OlivarezOct 30, 2024
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