Residual Income (RI)considers both the division's operating income and its average total assets.In addition,it also incorporates another piece of information known as top management's target rate of return.

Question

Quizplus · Accepted Answer

This statement is true. Residual income takes into account the operating income, total assets, and top management's target rate of return to determine how much income is generated beyond the required return on investment.

Residual Income (RI)considers Both the Division's Operating Income and Its