NOPAT Does Not Hold the Investment Center Manager Responsible for

question 62

Multiple Choice

NOPAT does not hold the investment center manager responsible for

• A)interest expense.
• B)interest expense and noninterest-bearing current liabilities.
• C)noninterest-bearing current liabilities.
• D)assets invested in the division.

---

Definitions:

Recoverable Amount

The higher of an asset's fair value less costs to sell and its value in use. It's the estimated amount an entity can obtain from an asset's use or sale, covering its carrying amount.

Carrying Amount

The value at which an asset is recognized on the balance sheet after deducting accumulated depreciation and impairment charges.

Cost Method

An accounting method used to record investments in which the investment is recorded at cost and dividends are recognized as income.

Dividends

Dividends are payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.