The Difference Between a Profit Center and an Investment Center

question 78

Multiple Choice

The difference between a profit center and an investment center is

• A) an investment center incurs costs, but does not directly generate revenues.
• B) an investment center incurs no costs but does generate revenues.
• C) an investment center is responsible for effectively using center assets.
• D) an investment center provides services to profit centers.
• E) There is no difference; investment center and profit center are synonymous.

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Definitions:

Internal Environment

The conditions, factors, and elements within an organization that influence its activities and choices, including culture, values, and internal resources.

Strategic Planning

The process of defining a strategy, or direction, and making decisions on allocating resources to pursue this strategy.

Specific Strategies

Detailed plans designed to achieve targeted objectives within a specific timeframe, often tailored to address certain challenges or opportunities.

Creative Strategy

Creative strategy outlines the direction and approach for achieving a marketing campaign's objectives through compelling and imaginative content and design.