- 3 Marks
Question
State ONE (1) similarity and TWO (2) differences between a Profit centre and an Investment centre.
Answer
Similarity:
- Both centers are responsible for effective cost minimization and maximization of profit.
Differences:
- An Investment center has additional responsibility for capital investments, whereas a Profit center does not handle capital investments.
- The performance of an Investment center is measured by return on investment (ROI) or residual income (RI), while the performance of a Profit center is measured based on controllable profit.
- Series: DEC 2023
- Uploader: Joseph