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residual income

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › residual income

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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  • May 29, 2020 at 8:08 am #572173
    AverageAndy
    Member
    • Topics: 128
    • Replies: 34
    • ☆☆

    sir i dont understand this definition of residual income mentioned in my study text:

    “RI is the net operating income that an investment centre or division earns above the minimum required return on its operating assets”

    May 29, 2020 at 9:16 am #572179
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54833
    • ☆☆☆☆☆

    It is the profit less (the required return multiplied by the net assets).

    I explain this in full, with an example, in my free lectures.

    The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

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