Return on investment is just a specific way of calculating residual income

Question

Quizplus · Accepted Answer

Return on investment (ROI) is a financial metric that measures the return on an investment relative to the investment's cost. Residual income is a financial metric that measures the difference between a company's net income and the minimum return required by its investors. ROI is a specific way of calculating residual income, as it takes into account the cost of the investment.

Return on Investment Is Just a Specific Way of Calculating