Which of the Following Will Not Result in an Increase

question 38

Multiple Choice

Which of the following will not result in an increase in the residual income,assuming other factors remain constant?

• A)An increase in sales.
• B)An increase in the minimum required rate of return.
• C)A decrease in expenses.
• D)A decrease in operating assets.

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Definitions:

Cash Dividend

A payout of cash from a company's profits to its stockholders.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Retained Earnings Statement

A financial statement that summarizes the changes in retained earnings for a specific period.

Income Statement

A financial statement that provides a summary of a company’s revenues, expenses, and profits/losses over a specified period.