A _____ Is an Independent Business Unit That Is Treated

question 31

Multiple Choice

A _____ is an independent business unit that is treated as a distinct entity enabling its revenues and expenses to be determined and its profitability to be measured.

• A) cost center
• B) revenue center
• C) profit center
• D) sales center

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Definitions:

Earnings Per Share

A company's profit divided by the number of outstanding shares of its common stock.

Equity Multiplier

A financial leverage ratio that indicates the portion of a company’s assets that are financed by stockholder's equity, calculated by dividing total assets by total shareholders' equity.

Financial Leverage

Use of borrowed funds to increase the potential return of an investment.

Basic Earning Power

A financial metric that measures a firm's ability to generate earnings from its operations before the impact of taxes and financing costs.