Question

Chester K. owns a consulting firm and hires freelance consultants to provide investment counseling services to a variety of clients. The firm shares rented office space with another company, which helps keep overhead costs low. When explaining investment options, Chester frequently refers to strategies he has used to manage the funds of his own firm. How would you classify this firm?

Answer 1

An investment center

Step-by-step explanation:

A division, firm, work team or department that directly contributes to the company's profit gain is referred to as an investment center. On the contrary, a cost center is a department that does not directly contribute to profit, but represents mainly a cost for the company, although it benefits the business.

Chester's firm is an investment center, as he keeps his overhead costs at a minimum and does outsourcing in terms of HR.