Assume that Division Blue has achieved a yearly operating income of $110,000 using $900,000 of invested assets. If management has set a minimum acceptable return on investment of 11%, the residual income is

A) $99,000
B) $691,000
C) $209,000
D) $11,000

Residual Income

The amount of income that an individual has after all personal debts and expenses have been paid, often used in corporate finance to measure the excess of actual profit over the expected return on investment.

Operating Income

Earnings from a company's core business operations, excluding costs and revenues from financing and investments.

Invested Assets

Definition: Assets that are used or held for investment purposes, which may include securities, real estate, and other investment vehicles.