Which of the Following Is the Correct Formula for Calculating

question 138

Multiple Choice

Which of the following is the correct formula for calculating residual income?

• A) Weighted average cost of capital - Net operating profit after tax
• B) Operating income - Minimum acceptable operating income
• C) Historical cost of assets - Accumulated depreciation
• D) Operating income / Average assets

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Definitions:

Seasonally-Adjusted Sales Forecast

A prediction of future sales that has been modified to account for regular seasonal variations in demand or sales patterns.

Complementary Demands

A market condition where the demand for two or more goods is linked because the goods are used together, leading to a rise in demand for one affecting the other positively.

Seasonal Fluctuations

Regular changes in patterns or levels of activity in data or phenomena influenced by seasonal conditions.

Tracking Signals

Indicators used in inventory management and demand forecasting to evaluate the accuracy of predictions and make adjustments.