Investment center: Difference between revisions
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==External links== |
==External links== |
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*[http://bookboon.com/uk/student/accounting/budgeting-and-decision-making Investment Center] |
*[http://bookboon.com/uk/student/accounting/budgeting-and-decision-making Investment Center] Page 39 "Budgeting and Decision Making" Textbook by Larry M. Walther & Christopher J. Skousen |
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Revision as of 12:18, 3 March 2010
An investment center is a classification used for business units within an enterprise. The essential element of an investment center is that it is treated as a unit which is measured against its use of capital, as opposed to a cost or profit center, which are measured against raw costs or profits.
The advantage of this form of measurement is that it tends to be more encompassing, since it accounts for all uses of capital. It is susceptible to manipulation by managers with a short term focus, or by manipulating the hurdle rate used to evaluate divisions.
See also
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External links
- Investment Center Page 39 "Budgeting and Decision Making" Textbook by Larry M. Walther & Christopher J. Skousen