Ch. 19 - Strategic Performance
Measurement Investment Centers
questions with answers.
Return On Investment (ROI) ANS -Some measure of profit divided by some measure of investment in a
business unit
Return On Sales (ROS) ANS -A firm's profit per sales dollar; measures the manger's ability to control
expenses and increase revenues to improve profitability
Asset Turnover (AT) ANS -The amount of sales dollars generated per dollar of investment, measures the
manager's ability to increase sales from a given level of investment
Historical Cost ANS -The book value of current assets plus the NBV of long-lived assets
Net Book Value (NBV) ANS -The original cost of a depreciable asset less accumulated depreciation to
date on that asset
Gross Book Value (GBV) ANS -An asset's historical cost without the reduction for accumulated
depreciation
Replacement Cost ANS -The current cost to replace the assets at the current level of service and
functionality
Liquidation Value ANS -The estimated price that could be received from the sale of the assets of a
business unit
Residual Income (RI) ANS -A dollar amount equal to the income of a business unit less an imputed
charge for the level of investment in the division
Measurement Investment Centers
questions with answers.
Return On Investment (ROI) ANS -Some measure of profit divided by some measure of investment in a
business unit
Return On Sales (ROS) ANS -A firm's profit per sales dollar; measures the manger's ability to control
expenses and increase revenues to improve profitability
Asset Turnover (AT) ANS -The amount of sales dollars generated per dollar of investment, measures the
manager's ability to increase sales from a given level of investment
Historical Cost ANS -The book value of current assets plus the NBV of long-lived assets
Net Book Value (NBV) ANS -The original cost of a depreciable asset less accumulated depreciation to
date on that asset
Gross Book Value (GBV) ANS -An asset's historical cost without the reduction for accumulated
depreciation
Replacement Cost ANS -The current cost to replace the assets at the current level of service and
functionality
Liquidation Value ANS -The estimated price that could be received from the sale of the assets of a
business unit
Residual Income (RI) ANS -A dollar amount equal to the income of a business unit less an imputed
charge for the level of investment in the division
