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In a profit center, the department manager has responsibility for and the authority to make decisions that affect
Depreciation
The systematic allocation of the cost of an asset over its useful life.
Investment Center
A business unit within a company that is responsible for its own revenues, expenses, and asset investments, with its performance measured by its ability to generate income relative to its assets.
Minimum Required Return
The lowest acceptable return on an investment, based on risk tolerance and financial goals.
Residual Income
The income that exceeds the minimum required return on investment or capital employed; often used as a performance measure.
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