A measure frequently used to evaluate the performance of the manager of an investment center is
A) the amount of profit generated.
B) the rate of return on funds invested in the center.
C) the percentage increase in profit over the previous year.
D) departmental gross profit.

Question

Quizplus · Accepted Answer

The rate of return on funds invested in the center is a useful measure because it takes into account the size of the investment center and allows for comparisons between different investment centers. It shows how efficiently the manager is using the resources available to generate profits. A high rate of return indicates that the manager is managing the funds effectively, while a low rate of return may indicate that improvements are needed in managing the center. The other options listed may be useful measures, but they are not as comprehensive or specific as the rate of return on funds invested.

A Measure Frequently Used to Evaluate the Performance of the Manager