Investment Center

	Investment Center 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 Investment Center takes care of Revenues, Cost and Assets, while a Profit Center deals with revenues and costs and Cost Centers with costs only. This is a clear sign of how the span of control and span of accountability grow from Cost Centers to Investment ones. 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 * Cost center * Profit center A profit center is a part of a business which is expected to make an identifiable contribution to the organization ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Cost Centre (business) A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but incur costs to the business, when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs. Types There are two main types of cost centres: * Production cost centres, where the products are manufactured or processed. Example of this is an assembly area. * Service cost centres, where services are provided to other cost centres. Example of this is the personnel department or the canteen. Examples * Marketing department * Human resources * Research and development * Work office * Quality assurance * Engineering * Logistics * Procurement Cost centres can be trimmed down to the smallest segregated tasks within Departments. It is not necessary to consider departments as outright cost centres. Some companies adopt a different ap ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Profit Center A profit center is a part of a business which is expected to make an identifiable contribution to the organization's profits. Overview A profit center is a section of a company treated as a separate business. Thus profits or losses for a profit center are calculated separately. A profit center manager is held accountable for both revenue and costs (expenses), and therefore for profits. This means that the manager is accountable for driving the sales revenue generating activities which lead to cash inflows and at the same time controlling the cost-generating activities. This makes the profit center management more challenging than cost center management. Profit center management is equivalent to running an independent business because a profit center business unit or department is treated as a distinct entity enabling revenues and expenses to be determined and its profitability to be measured. Business organizations may be organized in terms of profit centers where the prof ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Minimum Acceptable Rate Of Return In business and for engineering economics in both industrial engineering and civil engineering practice, the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects. A synonym seen in many contexts is minimum attractive rate of return. The hurdle rate is frequently used as a synonym of cutoff rate, benchmark and cost of capital. It is used to conduct preliminary analysis of proposed projects and generally increases with increased risk. Hurdle rate determination The hurdle rate is usually determined by evaluating existing opportunities in operations expansion, rate of return for investments, and other factors deemed relevant by management. As an example, suppose a manager knows that investing in a conservative project, such as a bond investment or another project with no risk, yields a k ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Cost Center (business) A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but incur costs to the business, when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs. Types There are two main types of cost centres: * Production cost centres, where the products are manufactured or processed. Example of this is an assembly area. * Service cost centres, where services are provided to other cost centres. Example of this is the personnel department or the canteen. Examples * Marketing department * Human resources * Research and development * Work office * Quality assurance * Engineering * Logistics * Procurement Cost centres can be trimmed down to the smallest segregated tasks within Departments. It is not necessary to consider departments as outright cost centres. Some companies adopt a different ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]
	Management Accounting In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. Definition One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. In other words, management accounting helps the directors inside an organization to make decisions. This can also be known as Cost Accounting. This is the way toward distinguishing, examining, deciphering and imparting data to supervisors to help accomplish business goals. The information gathered includes all fields of accounting that educates the administration regarding business tasks identifying with the financial expenses and decisions made by the organization. Accountants use plans to measure the overall strategy of operations within the organization. According to the Institute of Management Accountants (IMA), "Management accounting is a profession t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu]