What is the variable set by top management when calculating residual income?
A)the average operating assets
B)the operating income
C)the hurdle rate
D)the actual operating assets

Question

Quizplus · Accepted Answer

The variable set by top management when calculating residual income is the hurdle rate, which is the minimum rate of return that must be achieved for a particular investment or project to be considered acceptable. The other options (average operating assets, operating income, actual operating assets) are used in the calculation of residual income, but are not set by top management.

What Is the Variable Set by Top Management When Calculating