Which statement is true?
A) An investment center is responsible for revenues and expenses as well as earning a return on assets.
B) An investment center is only responsible for its investments.
C) An investment center is only responsible for revenues and expenses.
D) A profit center is evaluated using contribution margin while an investment center is evaluated using ROI.

Question

Quizplus · Accepted Answer

An investment center is responsible for generating revenues and incurring expenses, but also for earning a return on assets invested in the center. This distinguishes it from a cost center, which is only responsible for controlling costs, and a profit center, which is responsible for generating profits but not for investing in assets. The evaluation of an investment center is typically done using measures such as ROI (return on investment) or ROA (return on assets), while a profit center is evaluated using measures such as contribution margin or profit margin.

Which Statement Is True