Residual Income Is the Difference Between

question 40

Multiple Choice

Residual income is the difference between:

• A)net operating income and the minimum profit the organization must earn to cover the ROI.
• B)net operating income and the minimum acceptable profit.
• C)net operating income and the hurdle rate.
• D)net operating income times the hurdle rate,less average invested assets.

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Definitions:

Intangible Assets

Non-physical assets such as patents, copyrights, trademarks, and goodwill.

Trademark

A recognizable sign, design, or expression which identifies products or services of a particular source from those of others, legally registered to claim exclusive rights.

Intangible Assets

Non-physical assets that possess value, such as trademarks, patents, goodwill, and copyrights.

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.