Businesses or divisions owned by a firm that operate as independent profit centers are called what?

• A. Product Line
• B. Rising Stars
• C. Cash Cows
• D. Strategic Business Unit

Answer: (D)

An independent profit center within a larger company is described as a strategic business unit. An SBU has its own strategy, revenue targets, costs, and resources, and its performance is evaluated on its own profit and loss. This structure lets the unit act with a degree of autonomy to respond to market conditions while still aligning with the overall firm’s goals. The other terms don’t fit: a product line is a set of related products, not a separate profit center; and rising stars or cash cows are categories from the portfolio analysis (BCG matrix) used to describe market position and growth, not how a division is organized or managed financially.