Which of the Following Statements About Residual Income Is True

question 27

Multiple Choice

Which of the following statements about residual income is true?

• A)Residual income = Operating Income - Sales
• B)Residual income = Operating Income - Operating Assets
• C)Residual income is the amount of income in excess of a target or desired return on investment
• D)None of these.

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Definitions:

Capital Use

Refers to how effectively a company or economy utilizes its capital resources, including equipment and machinery, for production.

Farmworker

An individual engaged in labor within the agricultural sector, typically involving crop cultivation and livestock rearing.

Labor Force

The sum of individuals either holding a job or looking for work within a specific economic sector.

Agriculture

The practice of cultivating land and breeding animals to provide food, fiber, medicinal plants, and other products.