on the graph below the line a b c illustrates residual income measured on the vertic 630863
Items 1 and 2 are based on the following information:
On the graph below, the line (A-B-C) illustrates residual income (measured on the vertical axis in dollars) at various interest rates. Point D is the cost of capital or the required rate of return. Point E is the residual income at the cost of capital.
What does point B represent?
- Return on sales.
- Return on investment.
- Asset turnover.
- Operating income.
What does point A represent?
- Return on sales.
- Return on investment.
- Asset turnover.
- Net income.