A company which favors the residual income approach wants managers to ________.
A) concentrate on maximizing an absolute amount of dollars
B) concentrate on maximizing a percentage return
C) maximize the investment turnover ratio
D) maximize return on sales

Question

Quizplus · Accepted Answer

Residual income focuses on maximizing an absolute amount of dollars, as it measures the net income generated above the minimum required return on operating assets.

A Company Which Favors the Residual Income Approach Wants Managers