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a) Define profit center and investment center, and describe the difference(s) in ways that each is commonly evaluated. b) Use the investment center information below
a) Define profit center and investment center, and describe the difference(s) in ways that each is commonly evaluated. b) Use the investment center information below to calculate (a) return on total investment and (b) investment center residual income. Show all calculations. Net Income...... $315,900 Average Invested Assets. .... $2,100,000 Target Net Income. ..... . . . 6% of average division assets c) Provide a brief explanation of how the ratios in part b) are typically used by managers
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