Which of the following items will be most relevant in determining the imputed interest rate for the purposes of calculating residual income?
A) Final net profit
B) Return on investment
C) Investment turnover
D) Riskiness of investments undertaken

Question

Quizplus · Accepted Answer

The imputed interest rate for calculating residual income is dependent on the riskiness of the investments made. The return on investment and investment turnover may impact the overall profitability of the investment, but they do not directly affect the imputed interest rate. Final net profit may be a factor in determining residual income, but it is not the primary factor in determining the imputed interest rate.

Which of the Following Items Will Be Most Relevant in Determining