US CMA Part 1 · Chapter 3 · Question 15 of 30
The manager of a division is responsible for its revenues and costs and also has authority over the investment in assets used by the division. This division is best described as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) An investment center
Explanation
An investment center manager controls revenues, costs and invested capital, so performance is typically measured using ROI, residual income or EVA. A profit center manager controls revenues and costs but not the investment base.
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