Residual income is the
A)contribution margin of an investment center,less the imputed interest on the invested capital used by the center.
B)contribution margin of an investment center,plus the imputed interest on the invested capital used by the center.
C)income of an investment center,less the imputed interest on the invested capital used by the center.
D)income of an investment center,plus the imputed interest on the invested capital used by the center.

Question

Quizplus · Accepted Answer

Residual income is calculated by subtracting the imputed interest on the invested capital from the income generated by an investment center. This method helps in evaluating the performance of an investment center by considering both the income it generates and the cost of capital.

Residual Income Is the