Answer :
Answer:
A. Residual income measures
Explanation:
The residual income approach is the measurement of the net income that an investment earns above the threshold established by the minimum rate of return assigned to the investment. It can be used as a way to approve or reject a capital investment, or to estimate the value of a business.
Examples of residual income include real estate investing, stocks, bonds, investment accounts, and royalties.
Answer: C. Residual Income measure.
Explanation: Investments undertaken by a firm is usually attached with an estimated rate of return. The minimum rate of return is the minimum income an investor or firm is expected to make as profit on an investment expressed as a proportion of the initial investment cost. Exceeding these minimum rate of return on an investment is a good metric of measuring the effectiveness of a manager of an investment center. The excess amount earned as part of the net income on an investment after deducting amount earned as minimum return is called the residual income.