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Residual income can be defined as:
Multiple Choice:
O Income remaining after dividends are paid out.
O Operating earnings minus return on investment.
O Operating earnings plus a minimum acceptable return times average invested capital.
O Operating earnings minus a minimum acceptable return times average invested capital.

Respuesta :

ahmedgodtrust

Answer:

Residual income

= Operating earnings - (minimum acceptable return x  average invested capital)

The correct answer is  D

Explanation:

Residual income is one of the measures of divisional performance. It si the excess of operating earnings over the product of minimum acceptable return and average invested capital.

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