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14 March, 03:19

Which of the following formulas computes residual income?

a. Residual Income = Operating Income - Return on Investment

b. Residual Income = Operating Income - (Minimum Rate of Return * Average Operating Assets)

c. Residual Income = After-tax Operating Income / (Actual Percentage Cost of Capital * Total Capital Employed)

d. Residual Income = Operating Income / Average Operating Assets

e. Residual Income = (Minimum Rate of Return * Average Operating Assets) / Operating Income

+3
Answers (2)
  1. 14 March, 03:28
    0
    C

    Explanation:

    i think it's C. but I am not really show on it.
  2. 14 March, 03:58
    0
    I think its d? but i dont know for sure
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