Question

An investment center manager: Select one: a. does not have the ability to produce revenue. b. may be the manager who oversees the operations of a retail store. c. often oversees divisional operations. d. may be involved with the sale of new marketing programs to clients. e. would normally be held accountable for producing an adequate return on invested capital.

Answer 1

INVESTMENT CENTRE MANAGERS : AN EVALUATION

Investment Center is a business unit in a firm that can utilise capital in such a way to contribute directly to a company`s profitablity .Companies evaluate the performance of an investment center acccording to the revenue it brings in through investments in capital assets.

An investment sector manager utilise its own capital to generate returns that benefit to the firm. It is also accountable for its revenue, expense and assets and whose financial result are based on all three factors.

Investment center has its own financial statement comprise of income statement and balance sheet. Management evaluates an investment centerinvestor based on its return on those assets invested specifically in the investement center.

The return on investment (ROI) percentage at the core of investment centre. managers perforance is also evaluated by the ROI. as the ROI increases it will be good and decline in the ROI shows pitfall in the decision making power of the investment managers.

1. IT NOT SEEMS TRUE THAT managers cannot be evaluated by the revenue it must be evaluated by the revenue increases of the organization.if any managers dose not have the capabilities to generate revenue from the assets invested the decision makin power is not perfect.

2. As per oversees operation is concerned its good but not sufficient point to judge the performance of the investment centre managers decision. it is one of the point that managers help to established the oversees business unit but here ROI is totally ignored. which is important factor.

3.This also not seems true that oversees operation at separate division but similiar cretria is that assets recovery is ignored which is important point.

4. ITS GOOD with new marketing progrms to client but same condition is that more and more investment at returns is the only creteria for smooth functioning and long term impact upon the market.

5. THIS SEEMS TO BE TRUE THAT EVALUATION ON RETURN INVESTED:

MANAGERS performance is judge how asstes and resources given to that department and evaluating how well they utilize and generates revenue compared to expenses.

An investment centre managers also can use capital and funding to purchase other assets to increases revenues. managers can also evaluating its performance by the amount of return they produce on the capital they use.. Insted of looking at the overall profits or costs required to run the department. MANAGEMENT FOCUSES ON THE RETURN ON THE CAPITAL INVESTED AND INVESTMENT ON THAT DEPARTMENT which is the key to any success of any business unit.