Residual income is the excess of operating income over the cost of capital associated with the deployed assets. Following is information for four segments. Experiment with alternative rates of the cost of capital by using the pick list choices associated with the boxed area. Note how the relative residual income changes between the units based on the interest rate assumption! What do you wish to assume for the interest rate? >> > > 0% Segment A Segment B Segment C Segment D Operating income $ 1,200,000 $ 1,000,000 750,000 $ 500,000 Operating assets $ 8,000,000 $ 4,000,000 $ 2,000,000 $ 600,000 Assumed interest rate X 0 X 0 X 0 X 0 Cost of Capital $ Residual income $ 1,200,000 S 1,000,000 $ 750,000 500,000