Residual income is calculated as:
A)Operating income - (required rate of return × average operating assets)
B)Net income - (required rate of return × average operating assets)
C)Operating income - (required rate of return × average equity)
D)Net income - (required rate of return × average equity)

Question

Quizplus · Accepted Answer

Residual income is calculated by subtracting the product of the required rate of return and average operating assets from the operating income.

Residual Income Is Calculated As