What Is the Advantage of Using Operating Income or EBIT

question 50

Multiple Choice

What is the advantage of using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

• A)It is much easier to calculate than other measures.
• B)It is the only measure available to the senior management of the parent company.
• C)It excludes interest and taxes,which are beyond the manager's control.
• D)Divisional managers will maximize output if this measure is used for management control.

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