For residual income figures to be comparable on a companywide basis,all investment centers must have equal access to resources and similar asset investment bases.

Question

Quizplus · Accepted Answer

For residual income figures to be comparable on a companywide basis, all investment centers must have equal access to resources and similar asset investment bases. This is because residual income is calculated as the difference between an investment center's operating income and its required return on investment. If investment centers do not have equal access to resources or similar asset investment bases, then their residual income figures will not be comparable.

For Residual Income Figures to Be Comparable on a Companywide