A fully-owned subsidiary of a multinational firm reports return on investment four times a year.This is an example of:
A)a revenue center.
B)a cost center.
C)an investment center.
D)a profit center.

Question

Quizplus · Accepted Answer

The subsidiary is reporting return on investment, indicating that it is responsible for both the revenues and costs associated with its operations. As such, it is an investment center. A revenue center is responsible only for generating revenues, a cost center is responsible only for incurring costs, and a profit center is responsible for both revenues and costs but does not explicitly report return on investment.

A Fully-Owned Subsidiary of a Multinational Firm Reports Return on Investment