Residual income is the: 1) contribution margin of an investment center, less the

Question

Residual income is the: 1) contribution margin of an investment center, less the required return on the average operating assets used by the center.
2) contribution margin of an investment center, plus the required return on the average operating assets used by the center.
3) net operating income of an investment center, less the required return on the average operating assets used by the center.
4) net operating income of an investment center, plus the required return on the average operating assets used by the center

Explanation / Answer

Residual income is the: 1) contribution margin of an investment center, less the required return on the average operating assets used by the center.

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