How much is the residual income?

A) $80,000.
B) $100,000.
C) $40,000.
D) $420,000.

Residual Income

A profitability measure that subtracts an opportunity cost for capital from the profits generated.

Minimum Required Return

The minimum required return is the lowest acceptable profit or gain on an investment, factoring in the risk and opportunity cost.

Operating Income

Income generated from regular business operations, excluding costs of goods sold and other operating expenses.