Return on Total Assets for a Cost Center Is a Useful

question 143

True/False

Return on total assets for a cost center is a useful measure to evaluate the cost center manager.

---

Definitions:

Legal Dividend

A dividend that a company is legally allowed to distribute as determined by its net income or retained earnings.

Noncumulative Preferred Stock

A type of preferred stock that does not accumulate unpaid dividends; if a dividend is skipped, it is not required to be paid later.

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders but reinvested in the business or kept as a reserve.

Par Value

The face value of a bond or stock as stated by the issuer, which may differ from its market value.