Match each of the following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-The most common measure of performance for an investment centre
A)Turnover
B)Margin
C)ROI
D)Residual income

Question

Quizplus · Accepted Answer

ROI (Return on Investment) is the most common measure of performance for an investment centre. It calculates the net income as a percentage of the total investment.

Answer: D
 Residual income is another measure of performance for an investment centre that calculates the actual income earned above a minimum required return, based on the cost of capital.

Answer: A, B 
 Turnover (sales to assets ratio) and margin (net income to sales ratio) are measures of performance for profit centres, not investment centres.

Match Each of the Following Terms with Their Correct Description