Residual Income Represents an Excess of Income That Is Earned

Residual Income represents an excess of income that is earned above a firm's Required Rate of Return on its investment. Businesses often find that any Residual Income is the preferred outcome for both managers and the company as a whole. Which of the following correctly identifies the formula for Residual Income?

A) Operating Income - (Required Rate of Return × Investment)
B) Operating Income - Investment
C) Operating Income + (Required Rate of Return × Investment)
D) Required Rate of Return × Investment