Which of the following would increase residual income? (Assume all other things are equal)
A) Decrease in investment
B) Decrease in operating income
C) Increase in the desired return on investment
D) None of these.

Question

Quizplus · Accepted Answer

A decrease in investment would increase residual income because residual income is calculated as the net operating income minus the product of the desired return rate and the investment. Therefore, a decrease in investment would reduce the deduction from the net operating income, increasing the residual income.

Which of the Following Would Increase Residual Income? (Assume All