Which of the Following Statements Is/are Correct

question 61

Multiple Choice

Which of the following statements is/are correct?

• A) Invested capital is the assets that an investment centre has available to generate profit.
• B) When evaluating an investment centre, only the profit is important.
• C) Return on investment focuses on how effectively each investment centre has used its investment capital.
• D) Invested capital represents the assets that an investment centre has available to generate profit AND return on investment focuses on how effectively each investment centre has used its investment capital.

---

Definitions:

Marginal Cost

Incremental cost incurred when one more unit of a product or service is produced.

Total Variable Cost

The sum of expenses that change in proportion to the activity or volume of production.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it fluctuates with changes in output.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a good or service.