How will increases in the following items affect residual income? $$\begin{array} { | l | c | c | }
\hline & \text { Sales } & \text { Equipment } \
\hline \text { A. } & \text { Decrease } & \text { Decrease } \
\hline \text { B. } & \text { Decrease } & \text { Increase } \
\hline \text { C. } & \text { Increase } & \text { Decrease } \
\hline \text { D. } & \text { Increase } & \text { Increase } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Question

How will increases in the following items affect residual income? $$\begin{array} { | l | c | c | } 
\hline & \text { Sales } & \text { Equipment } \
\hline \text { A. } & \text { Decrease } & \text { Decrease } \
\hline \text { B. } & \text { Decrease } & \text { Increase } \
\hline \text { C. } & \text { Increase } & \text { Decrease } \
\hline \text { D. } & \text { Increase } & \text { Increase } \
\hline
\end{array}$$
A) Option A
B) Option B
C) Option C
D) Option D

Quizplus · Accepted Answer

An increase in sales typically increases residual income as it boosts net income. An increase in equipment usually decreases residual income due to higher capital charges.

How Will Increases in the Following Items Affect Residual Income