Que. 1: Evaluate each of the concerns expressed by top management, and if necessary, make recommendation appropriate to the circumtences described in the case
The Abrams case is about using profitability measures to evaluate profit centers. The case also reflects a long academic debate in the US-literature about ROI problems. In EU companies it is more common to evaluate PCs with Income measures like RI and EVA. This case covers the tree main problems in controlling profit centers: