Which one of the following is a correct statement about residual income?

Question

Quizplus · Accepted Answer

Residual income evaluates the performance of an investment centre by comparing the return on investment with the company's minimum rate of return. Option A is incorrect as the goal of residual income is not to maximize profits but to evaluate performance. Option B is incorrect as residual income is considered more effective than ROI for evaluating investment centres. Option C is incorrect as it describes the formula for calculating residual income, not its definition.

Which One of the Following Is a Correct Statement About