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Problems of profit based measures
- Absolute profit measures ignore the amount of investment in the division e.g. does not look at profit relative to capital employed.
- So many different measures of profitability and profit terminology.
- Practical and political problems when addressing 'uncontrollable' expenditure.
Division X has a target return on investment (ROI) of 12%. It has fixed costs of £400,000 and a variable cost per unit of £5. The net assets of the division forecast for the next
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Process design strategy define with example
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