An advantage of using a residual income (RI) indicator, as opposed to using a return on investment

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An advantage of using a residual income (RI) indicator, as opposed to using a return on investment (ROI) indicator is that it:

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Takes in to account a company's required rate of return

Encourages a long-term focus

Doesn't have any bias based on company size

Discourages investments in projects that have a low weighted cost of capital

Posted Date: Jun 19, 2024 10:50 AM

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An advantage of using a residual income (RI) indicator, as opposed to using a return on investment

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