The Basic Idea Behind Residual Income Is to Have a Division

question 57

Multiple Choice

The basic idea behind residual income is to have a division maximize its:

• A) earnings per share.
• B) income in excess of a corporate imputed interest charge.
• C) cost of capital.
• D) cash flows.
• E) invested capital.

---

Definitions:

Colosseum

An iconic ancient amphitheater in Rome, known for its vast size and for hosting gladiatorial combats, spectacles, and public entertainments.

Arch

A curved structural member that spans an opening and is generally composed of wedge-shaped blocks (voussoirs) that transmit the downward pressure laterally. See also thrust.

Lost Wax

A method of metal casting in which a molten metal is poured into a mold that has been created using a wax model, which is then melted away and lost.

Repoussé

Formed in relief by beating a metal plate from the back, leaving the impression on the face. The metal sheet is hammered into a hollow mold of wood or some other pliable material and finished with a graver. See also Relief.