computing ROI,
Q: ccurred? A) Cash discounts are offered on the products the company sells. B) The business…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: hat way can the use of ROI as a performance measure for investment centers lead to bad decisions?…
A: ROI is the return on investment in which the there is consideration for the current year profit only…
Q: Managers in which of the following responsibility centers are held responsible forprofits? (You may…
A: C. Profit centers is the answer
Q: Which statement below best describes a profit center?a. The authority to make decisions affecting…
A: Answer c. The authority to make decisions over the most significant costs of operations, including…
Q: Managers have some flexibility in setting the estimated useful lives of depreciable assets. Explain…
A: The managers can determine the useful life of assets. The depreciation per year depends on this…
Q: most significant drawback of evaluating investment centers using RO
A: ROI is an accounting metric used to evaluate the return on invested capital of the business.
Q: What is the biggest disadvantage of using ROI to evaluate investment centers?
A: Return on Investment: Under return on Investment, the investment opportunity with the highest rate…
Q: Faced with a long-run make-or-buy decision, the manager should do all of the following except: a.…
A: Ans. While considering a make - or- buy decision a manager is expected to do a lots of study and…
Q: Discuss the importance of nonfinancial information in measuring investment-center performance.
A: Non Financial Information Non financial information refers to those aspects of business which cannot…
Q: Most organizations use residual income instead of return on investment (ROI) as a performance…
A: The Following statement is True because Residual Income is much better than Return on Investment…
Q: Which of the following statement(s) is/are not true?
A: Return on investment is return earned in term of percentage of average assets employed.
Q: Calculate the return on investment for each division. If required, round the ROI to the nearest…
A: Return on Investment is the Income which the Company has Earned for the investment on the project,…
Q: What is the fundamental flaw in utilizing income from operations as a success metric for investment…
A: Introduction: Investment centers are companies that make investments to boost their profits.
Q: What is the primary disadvantage of utilizing revenue from operations to evaluate investment…
A: Investment centers are businesses that invest in other companies to boost their profits.
Q: Firms often treat investment centers as if they were a... Revenue center Stand-alone business…
A: Decentralization: Decentralization alludes to a particular type of authoritative construction where…
Q: Discuss how the behavior of division managers is likely to be affected by the use of: a. Return on…
A: Division managers provide leadership and assistance to their team members. It provide guidance and…
Q: If ROI is used to evaluate a manager’s performance for a relatively new division, which of the…
A: The correct option is b that is, Net book value using accelerated rather than straight-line…
Q: ent center manage
A: Rate of investment :money is a metric that's wide wont to live the likelihood of gaining a come…
Q: In what way can the use of ROI as a performance measure for investment centers lead to bad…
A: ROI: It is a measure on the amount of return on a particular investment with respect to the…
Q: In what ways might using ROI as a performance indicator for investment centers lead to poor…
A: ROI: It measures the amount of return on a specific investment to the cost of the investment. The…
Q: Which of the following statements is NOT a benefit of return on investment (ROI) as a measure of the…
A: Investment- An investment is a type of asset created by an investor using his or her own money and…
Q: Use of Earned Value Analysis in performance reporting What are the different metrics used? What is…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: What is a major shortcoming of just using Income from Operations as a performance measure for…
A: Income from operations states the results of deducting the operating expenses from the gross profit.…
Q: Demonstrate and compare how return on investment and residual income are used to assess the success…
A: It essentially refers to the average return on an investment over a certain period. It's pretty…
Q: What is the major shortcoming of using income from operations as a performance measure for…
A: Investment centre are who do investment of organisation to increase income.
Q: ROI based on the gross book value of assets
A: ROI indicates the profitability of the investment made. It is the measure of net income in relation…
Q: As a financial manager,;one's goals for the client is to help them do the following EXCEPT: A.…
A: The financial manager is the person responsible for looking after the financial health of the…
Q: Residual income is better measure for performance evaluation of an investments center manager than…
A: Correct Option is 2nd - Desirable investments decisions will not be neglected by high-return…
Q: The use of market price in internal transfers, generally, provides managerial incentive and leads to…
A: Market price refers to the price that is prevailing in the market in normal conditions considering…
Q: The primary difference between profit centers and cost centers is that Multiple Cholce Profit…
A: Profit center is an organization department which aims at profit ascertinment and it increases…
Q: To compete successfully for the better stockholders and better lenders, a business would need: Good…
A: Financial ratios assist investors and lenders in deciding which companies to invest in or lend to.…
Q: Which of the following statements is not an Objective of the cost management system Select one: a.…
A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…
Q: return
A: The term profitability refers to metric which is used to measure profits. An analysis is made on how…
Q: How may using ROI as a success indicator for investment centers lead to poor decisions? How does the…
A: ROI: It calculates the amount of return on a particular investment about the investment's cost. The…
Q: Show and compare how return on investment and residual income are used to evaluate the performance…
A: Introduction: It refers to the average return on an investment over a specific period. It's…
Q: The best measure for evaluating the effectiveness of a manger in an investment center would be A.…
A: Responsibility Center is division of organization into different center with each center responsible…
Q: What is the major shortcoming of using income from operations as a performance measure for…
A: Investment center: A department or unit or division of a corporation where its manager is assigned…
Q: key flaw in utilizing income from operations as a performance indicator for investment centers
A: Performance indicator means the factors used to analyze the operations of a business.
Q: Please explain a major shortcoming of using income from operations as a performance measure for…
A: Invesment centers are those units or organisations that a business will utilise its capital to…
Q: Which of the following statement(s) is/are not true? i. Return On Investment (ROI) as a…
A: i. Return On Investment (ROI) as a performance measure may discourage managers of divisions with…
Q: In what way can the use of ROI as a performance measure for investment centers lead to baddecisions?
A: Return On Investment (ROI): It is a measure on the amount of return on a particular investment with…
Q: Explain and compare how return on investment and residual income are used to evaluate investment…
A: It basically means the average return on an investment in a particular period in which the…
Q: Which of the following is not a measure that management can use in evaluating and controlling…
A: The investment centers are typically very large divisions of a company. Investment center managers…
In computing
- is considered a nonoperating asset.
- is included in the calculation of operating assets.
- will hurt the performance measurement of an investment center's manager.
- is important in evaluating the performance of a profit center manager.
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- A profit center manager often also supervises revenue and cost center managers. True or False True False Investment center managers have control over the investment of assets. True or False True False The balanced scorecard attempts to focus managers' attention on more than just financial measures. True or False True False____ 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center ____ 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin ____ 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 ____ 4.Remark…Please explain a major shortcoming of using income from operations as a performance measure for investment centers.
- Instructions: Designate the best answer for each of the following questions. 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 4.Remark…Discuss the concept of controllable and uncontrollable costs and how they affect the evaluation of the responsibility centers financial performance.Based on the profit maximization goal, the financial manager would choose Asset D. Asset B. Asset A. Asset C.
- Match each of the following terms with the best definition. A. Theory of constraints B. Sunk cost C. Differential analysis D. Opportunity cost - Strategy that focuses on reducing bottlenecks. - Revenue forgone from an alternative use of an asset. - Not relevant to future decisions. - Evaluation of how income will change based on an alternative course of action.Which statement below best describes an investment center? a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply. b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital. c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply. d. The authority to provide specialized support to other units within the organization. e. The responsibility for developing markets for and selling of the output of the organization.Which statement below best describes a profit center?a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets, sources of supply, and significant control over the amount of invested capital.c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.d. The authority to provide specialized support to other units within the organization.e. The responsibility for combining the raw materials, direct labor, and other factors of production into a final product.
- In a profit center, the manager has responsibility and authority for making decisions that affect a.assets b.investments c.long-term liabilities d.revenuesWhich of the following statements regarding responsibility accounting systems is true? O Residual income is best used when evaluating the performance of profit centers rather than investment centers. An advantage of using return on investment to evaluate performance is that it encourages managers to increase both operating assets and operating income. O The use of residual income as a performance measure may lead segment managers to reject investments in projects that would be favorable for the company as a whole. O Residual income is a less effective metric for evaluating performance if there are significant differences in the size of the operating segments. O None of the above statements is true.What is Return On Investment? Analyze the use of ROI and the impact that it has within an organization. What are the pros and cons of it? Please explain.
