The Best Measure for Evaluating the Effectiveness of a Manger

question 145

Multiple Choice

The best measure for evaluating the effectiveness of a manger in an investment center would be ________.

• A) residual income measures
• B) success in controlling costs
• C) success in meeting budgeted revenues
• D) current ratio measures

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Definitions:

Unreimbursable Costs

Unreimbursable costs are expenses incurred by a party that cannot be recovered through billing or other forms of payment from clients or customers.

Sales-Type Lease

A sales-type lease is a type of lease where the lessor recognizes profits from the selling price of the leased asset and interest income from the financing, distinguished from an operating lease.

Guaranteed Residual Value

The predetermined value at which a lessee can buy a leased asset at the end of the lease term, as guaranteed by the lessee or a third party.

Cost of Goods Sold

The specific expenses related to manufacturing the products that a business sells, encompassing labor and materials.