Investment centre


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Investment centre: ‘a profit centre in which inputs are measured in terms of expenses and outputs are measured in terms of revenues and in which assets  employed are measured – the excess of revenue over expenditure then being related to assets employed’.

The investment centre or divisional manager is allowed discretion about the amount of investment undertaken by the division so profit measurement alone is not sufficient to measure performance. Profit should be related to the capital employed in the division.

 


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