The formula for residual income is:
A)profit before tax - (required rate of return x investment).
B)profit/sales.
C)sales/investment.
D)operating profit after tax - (cost of capital x capital).

Name: The formula for residual income is: A)profit before tax - (required rate of return x investment). B)profit/sales. C)sales/investment. D)operating profit after tax - (cost of capital x capital).
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Question

Quizplus · Accepted Answer

Residual income is calculated as profit before tax minus the required rate of return multiplied by investment.

The Formula for Residual Income Is