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Residual Income
Income that remains after subtracting all the cost of capital from the net operating profit.
Investment Opportunity
Any vehicle through which funds can be invested to potentially earn a return, such as stocks, bonds, real estate, or a business venture.
Minimum Required Rate
Often refers to the minimum rate of return that an investment must offer to be considered viable or the minimum acceptable compensation for delay or risk.
Revenue Variance
The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.
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