Which of the Following Is Not a Valid Reason for Developing

question 81

Multiple Choice

Which of the following is not a valid reason for developing responsibility center information?

• A)Responsibility center information is useful in deciding how to allocate resources among segments of the business.
• B)Separately measuring the revenue and expenses of each responsibility center is a necessary step in developing financial statements for the business entity viewed as a whole.
• C)Responsibility center information is useful in evaluating the performance of segment managers.
• D)Responsibility center information helps management to quickly identify sections of the business that are performing poorly.

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Definitions:

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, reflecting the risk associated with the investment.

Net Cash Flows

The difference between a company's cash inflows and outflows in a given period, indicative of its financial health.

Capital Budgeting

The process of evaluating and selecting long-term investments consistent with the firm's goal of wealth maximization.

Net Cash Flows

The difference between cash inflows and outflows during a specific period, reflecting the company's financial health.