Matching
Match each of the following terms with the phrase that most closely describes it. Each answer may be used only once.
_____ 1. Balanced scorecard ________ 7. NOPAT
_____ 2. Cost center ________ 8. Profit center
_____ 3. Decentralized organization ________ 9. Profit margin
_____ 4. Economic value added ________ 10. Residual income
_____ 5. Goal congruence ________ 11. Return on investment
_____ 6. Investment center ________ 12. Investment turnover
A. Ratio of investment center income to invested capital
B. Net income + interest expense – tax savings due to interest expense
C. Firms that grant substantial decision-making authority to the managers of subunits
D. Ratio of income to sales
E. Compatibility between personal goals and the goals of the organization
F. Residual income adjusted for accounting distortions
G. Subunit that has responsibility for controlling costs but is not responsible for generating revenues
H. Ratio of sales to invested capital
I. Subunit that has responsibility for generating revenues as well as controlling costs
J. Set of performance measures that consider factors other than financial results
K. Subunit charged with earning income that is consistent with the amount of assets invested in the segment
L. NOPAT minus profit required for the level of investment in the investment center
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