Residual income refers to income in excess of a charge for the capital that is employed to generate that income.

Question

Quizplus · Accepted Answer

Residual income is the income earned above and beyond the minimum rate of return required by an investor or company. It is the profit earned from an investment after deducing the cost of capital used to generate that income. Therefore, residual income is income in excess of a charge for the capital that is employed to generate that income.

Residual Income Refers to Income in Excess of a Charge