The Performance Evaluation of a Profit Center Is Typically Based

question 57

Multiple Choice

The performance evaluation of a profit center is typically based on its

• A)segment margin.
• B)static budget variance.
• C)return on investment.
• D)return on assets.

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Definitions:

Amortization Expense

The portion of the cost of an intangible asset that is allocated as an expense in a company's income statement over a set period.

Capital Assets

Long-term assets acquired or owned by a business or individual for the purpose of generating income or investment.

Exchange Rates

The rate at which one currency can be exchanged for another, often influenced by market conditions and economic indicators.

Exchange Gain/Loss

A financial result that occurs when the value of foreign currency transactions changes due to fluctuations in exchange rates between the initial transaction and settlement dates.