Asked by
Gianna Guarino
on Nov 13, 2024
Verified
In the formula for ROI idle plant assets are
A) included in the calculation of controllable margin.
B) included in the calculation of operating assets.
C) excluded in the calculation of operating assets.
D) excluded from total assets.
Idle Plant Assets
Fixed assets that are not currently in use for production, operations, or providing services, often due to reduced demand or operational changes.
Operating Assets
Assets that are used in the day-to-day operations of a business to generate revenue, excluding investment and non-operational assets.
Controllable Margin
The portion of profit or income that can be directly controlled or influenced by management decisions.
- Appreciate the implications of asset valuation methods on investment center performance.
Verified Answer
PA
Learning Objectives
- Appreciate the implications of asset valuation methods on investment center performance.