Residual income is calculated as the difference between reported operating income and the financial opportunity cost of the investment base.

Name: Residual income is calculated as the difference between reported operating income and the financial opportunity cost of the investment base.
Brand: Quizplus
Rating: 4.8 (34 reviews)

Question

Quizplus · Accepted Answer

This is the correct definition of residual income. It is calculated using the formula: Residual Income = Operating Income - (Investment Base x Required Rate of Return)

Residual Income Is Calculated as the Difference Between Reported Operating