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).

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Definitions:

Elasticity

A measure in economics that denotes the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Product Uses

The various applications or purposes for which a product is intended or can be utilized by consumers.

Unit Elasticity

A situation in economics where a change in the price of a good or service results in a proportionally equal change in the quantity demanded or supplied.

Price Elasticity of Demand

A measure of the sensitivity of quantity demanded of a good to a change in its price.