Under the Notion of Controllability, It Is Appropriate to Evaluate

question 7

Multiple Choice

Under the notion of controllability, it is appropriate to evaluate the profitability of each investment center based on each center's:

• A) Operating income before tax.
• B) Operating income after tax.
• C) Return on sales (ROS).
• D) Profit earned in relation to the amount of capital invested in the subunit.
• E) Return on equity (ROE).

---

Definitions:

Transfer Taxes

Taxes imposed by a state or local government on the transfer of ownership of property, such as real estate, from one party to another.

Available-For-Sale

A classification for financial assets, indicating that the asset can be sold in the future, and is not held for trading or intended to be held to maturity.

Dividends

Profits distributed by a corporation to its shareholders, usually in the form of cash or additional stock.

Common Stock

Common stock represents shares of ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends, albeit with lower priority than preferred stock in dividend payment and asset liquidation.