Which of the following will not result in an increase in the residual income,assuming other factors remain constant?
A)An increase in sales.
B)An increase in the minimum required rate of return.
C)A decrease in expenses.
D)A decrease in operating assets.

Question

Quizplus · Accepted Answer

An increase in the minimum required rate of return would result in a higher cost of capital and therefore a lower residual income. The other choices either increase revenue or decrease expenses, which would increase the residual income.

Which of the Following Will Not Result in an Increase