Question

A measure frequently used to evaluate the performance of the manager of an investment center is - the rate of return on funds invested in the center. - the amount of profit generated. - departmental gross profit. - the percentage increase in profit over the previous year.

Answer 1

Answer:

The correct answer is letter "A": the rate of return on funds invested in the center.

Explanation:

The Rate of Return or RoR is the earnings an asset generates more than its initial cost. The amount is usually expressed in an annualized percentage rate. The RoR is calculated based on the cash flows generated by the asset. Besides, it can include a capital gain element. The RoR is helpful to find out if the performance of the investment manager was appropriate or not.