Question

investment centres is better or profit centres in view of performance measurement divisions .​

Answer 1

Explanation:

A profit center is an organizational unit that is responsible to top management for some measure of its own profitability—a measure like net income, pretax income, or net contribution. Revenues measure the unit’s outputs, expenses measure its inputs, and profit measures its excess of revenues over expenses.

An investment center is an organizational unit responsible to top management for its profitability in relation to the unit’s own investment base. Revenues and expenses are measured as in profit centers, but the assets employed are also measured. Thus an investment center is an extension of the profit center idea: profit is measured for both, but only in an investment center is this profit related to the size of the investment base.