All other things constant, which of the following would increase residual income?
A) Increase in average operating assets.
B) Decrease in average operating assets.
C) Increase in minimum required rate of return.
D) Decrease in net operating income.

Question

Quizplus · Accepted Answer

A decrease in average operating assets would increase residual income because it reduces the capital charge, assuming net operating income remains constant.

All Other Things Constant, Which of the Following Would Increase