CA Inter P4 · Chapter 1 · Question 3 of 8
A divisional manager who is accountable for revenues, costs and the capital employed in the division is in charge of a(n):
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Investment centre
Explanation
An investment centre is a responsibility centre where the manager controls revenues, costs and the investment (capital employed), so performance can be measured with return on investment or residual income. A profit centre manager controls revenues and costs but not investment decisions.
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