Residual income is used as a key performance indicator for evaluating an investment center's financial performance.

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Residual income is a measure of the profitability of an investment center after taking into account the cost of the capital that was invested in it. It is considered a more accurate way of assessing financial performance than traditional measures such as return on investment (ROI) or earnings before interest and taxes (EBIT). Therefore, residual income is often used as a key performance indicator for evaluating an investment center's financial performance.

Residual Income Is Used as a Key Performance Indicator for Evaluating