Three Measures of Investment Center Performance Are Income from Operations

question 179

True/False

Three measures of investment center performance are income from operations, rate of return on investment, and residual income.

---

Definitions:

Inter-Entity Transactions

Inter-entity transactions refer to the economic exchanges between different entities within the same corporate structure, often requiring elimination during consolidation for accurate financial reporting.

NCI

Non-Controlling Interest, a stake in a company that is not sufficient to yield control over the company, representing ownership by minority shareholders.

Profit

The financial gain derived from a transaction or the operation of a business after subtracting expenses.

Inter-Entity Transactions

Transactions that occur between two divisions within the same company, often used for the purpose of allocating costs or revenues between those divisions.