A Manager of a Cost Center Is Evaluated Mainly on

question 49

Multiple Choice

A manager of a cost center is evaluated mainly on

• A) the profit that the center generates.
• B) his or her ability to control costs.
• C) the amount of investment it takes to support the cost center.
• D) the amount of revenue that can be generated.

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Definitions:

Money Demand Curve

A graphical representation showing the relationship between the quantity of money people want to hold and the interest rate, under the assumption all other factors remain constant.

Opportunity Cost

The consequence of losing possible gains from various options when one preference is made.

Interest Rate

The cost of borrowing money or the return for investing money, usually expressed as a percentage per annum.

Money Demand

The desire to hold cash or liquid assets rather than making investments, influenced by interest rates, income levels, and inflation.