Identify Which of the Following Definitions of Invested Capital Is

question 125

Multiple Choice

Identify which of the following definitions of invested capital is not recommended for measuring the performance of division managers.

• A) total assets less current liabilities
• B) total assets employed
• C) total assets less total liabilities
• D) total assets

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Definitions:

External Costs

Costs incurred as a result of an economic activity that are not borne by the entities undertaking the activity but rather by other parties or society at large.

Marginal Cost

The rise in expense associated with the production of an extra unit of a product or service.

Benefits To Consumers

Refers to the advantages or improvements in well-being and satisfaction that consumers experience from purchasing and using goods and services.

Externalities

Monetary consequences that reach beyond the primary parties, impacting others positively or negatively.