Decentralized Firms Can Delegate Authority and Yet Retain Control and Monitor

question 29

Multiple Choice

Decentralized firms can delegate authority and yet retain control and monitor managers' performances by structuring the organization into so-called "responsibility centers." Which one of the following business segments/responsibility centers is most like an independent business?

• A) Revenue center.
• B) Profit center.
• C) Cost center.
• D) Profit and loss center.
• E) Investment center.

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Definitions:

Operating Cash Flows

The cash generated from the normal operations of a business, reflecting its ability to generate sufficient revenue to maintain and grow operations.

Expansion Projects

Initiatives undertaken by a business to increase its capacity, scope, or operations, often through investments in new facilities, products, or markets.

New Ventures

Refers to newly established businesses or startups that aim to meet a marketplace need by developing a viable business model.

Initial Outlay

The initial capital investment required to start a project or investment, often encompassing costs beyond just the purchase price.