Which of the following is not a measure that management can use in evaluating and controlling investment center performance?
A) return on investment
B) negotiated price
C) residual income
D) income from operations

Question

Quizplus · Accepted Answer

Negotiated price is not a measure that management can use in evaluating and controlling investment center performance. It is a term used in procurement or purchasing activities to determine the price to be paid for goods or services negotiated between the buyer and the supplier. The other options, return on investment, residual income, and income from operations, are all measures that management can use to evaluate and control investment center performance. Return on investment measures the profitability of an investment relative to the amount of capital invested. Residual income measures the operating income that exceeds the minimum required return on the invested capital. Income from operations measures the profitability of a business's operations before considering non-operating income and expenses.

Which of the Following Is Not a Measure That Management