Investment centre question

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January 2, 2017 at 6:58 am #364812
mmensah
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Hi Sir
Question on investment centers…
“The manager of an investment center who is being assessed by return on investment must have control over its financing” True or False.
The book says no- but I do not understand why? why wont a manager of an investment center have control over its financing options?
thanks
January 2, 2017 at 7:14 am #364818
John Moffat
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A division (which is what this is) does not raise its own finance – it is not a separate company.
It is the company of which the division is a part that decides on the financing (and provides finance to the division).
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