How is performance evaluated for an investment center?
A) Actual costs incurred compared to budgeted costs.
B) Actual segment margin compared to budgeted segment margin.
C) Comparison of actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment.
D)None of the above.

Question

Quizplus · Accepted Answer

Performance of an investment center is typically evaluated through comparing actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment. This measurement allows for a better understanding of the segment’s profitability in relation to its size and investment. While actual costs incurred and actual segment margin may be evaluated, they are not the primary metrics used to measure investment center performance.

How Is Performance Evaluated for an Investment Center