In designing an effective management control system for a multinational corporation, the accountant should measure factors appropriate for each unit's level of responsibility.

Which of the following measures would be appropriate for evaluating the performance of an investment center? a) Output on costs of inputb) Residual incomec) EBITd) All of the above

Question

Business

Orlando Miller

14 March, 10:39

In designing an effective management control system for a multinational corporation, the accountant should measure factors appropriate for each unit's level of responsibility.

Which of the following measures would be appropriate for evaluating the performance of an investment center? a) Output on costs of inputb) Residual incomec) EBITd) All of the above

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Answers (1)

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Virginia Dillon · Answer 1

b) Residual income

Explanation:

Residual income would be appropriate for evaluating the performance of an investment center, is important to consider aswell, that residual income measures the excess of operating income over minimum required return.

For these two previous reasons, the correct answer is option b.