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Definition of Residual Income

Definition: What is Residual Income?

Residual income is the leftover amount of the money after the payment of all the necessary expenses and costs for a period. For personal finance and corporate operations, it can be applied.

Definition of Residual Income

Personal residual income is the amount of income left over after the payment of debt like car loans, mortgages have been paid for each month.

On the other hand business, residual income is the net operating income of the department or investment centre. It is the amount that the department’s profit exceeds its minimum required return.

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