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One approach to measuring the short-term financial performance of a business unit considered an investment center is return on investment (ROI). ROI is expressed as
One approach to measuring the short-term financial performance of a business unit considered an investment center is return on investment (ROI). ROI is expressed as operating income of the investment center:
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Divided by the assets used by the investment center.
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Divided by the current year's capital expenditures plus cost of capital.
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Minus the asset turnover (AT) of the investment center.
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Divided by fixed assets.
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Minus imputed interest charged for the use of invested capital by the investment center.
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