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“If the performance of the investment centre is being appraised, head office assets or investment centre assets controlled by head office should not be included in calculation of ROI.”
the above statement should be true, but i don’t understand sir why BPP is showing false?
Because when we talk about appraising managers’ performance we always look at the aspect of controllability of different elements, whether profits or capital employed.
Thank you sir!
I don’t know whether or not you have typed out the entire question, but if you have then the statement does not mention appraising the manager’s performance. It refers to the performance of the division.
If they were just appraising the manager’s performance then indeed they would only include profits and assets that were under the control of the manager. But as far as the performance of the division as a whole is concerned then it doesn’t matter who controls things.
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