Vanessa Grant is responsible for controlling expenses, but is not responsible for generating revenues. Vanessa Grant is a manager of a(n):

Liability center.

Profit center.

Investment center.

Cost center.

2.

To avoid suboptimization, many companies prefer to evaluate their investment centers using:

Return on investment instead of residual income.

Residual income instead of return on investment.

Sales instead of income.

Gross margin instead of contribution margin.

3.

Which of the following statements about residual income is true?

Residual income is the amount of income in excess of a target or desired return on investment

None of these.

Residual income = Operating Income - Operating Assets

Residual income = Operating Income - Sales

4.

Which of the following statements about residual income is true?

Residual income is the amount of income in excess of a target or desired return on investment

None of these.

Residual income = Operating Income - Operating Assets

Residual income = Operating Income - Sales