Evaluation of Responsibility Centers

question 51

Essay

Evaluation of responsibility centers
Shown below are the current-year data for two investment centers of Chelsea Trading,Inc.The total assets utilized by each of these investment centers during the year amount to $1,500,000: (a)Compute the following measures for each investment center: (b)Assume that a $3,000 monthly expenditure for advertising could increase the monthly sales of either investment center by $20,000.Which center should the company advertise to receive the maximum benefit from its advertising expenditure? Center _________.Explain your reasoning:

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports over a certain period, indicating that it is importing more goods and services than it is exporting.

Foreign Hands

Refers to the involvement or ownership by individuals, companies, or governments from other countries.

American Dollars

refer to the currency of the United States, used as the primary form of money in the country and a major global reserve currency.

Domestic Inflation

The speed at which the overall price level of goods and services increases, leading to a decrease in the country's purchasing power.