Which Statement Is True

question 9

Multiple Choice

Which statement is true?

• A) An investment center is responsible for revenues and expenses as well as earning a return on assets.
• B) An investment center is only responsible for its investments.
• C) An investment center is only responsible for revenues and expenses.
• D) A profit center is evaluated using contribution margin while an investment center is evaluated using ROI.

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Definitions:

Cost Curve

A graphical representation that shows the relationship between the total cost incurred by a firm and the level of output produced.

Average Total Cost

The cost per unit of output, found by dividing the total cost (fixed plus variable) by the number of units produced.

Cigars

Rolled bundles of dried and fermented tobacco leaves designed to be smoked.

ATC and MC Curves

Graphs in economics that represent a firm's average total costs (ATC) and marginal costs (MC) at different levels of production.