When using residual income, some companies prefer to use the weighted average cost of capital as a basis for determining the imputed interest charge.

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Kelly Mejia · Accepted Answer

Final Answer : True, Explanation :  This statement is true. The weighted average cost of capital is often used as the imputed interest rate in residual income calculations as it reflects the cost of financing the company's assets.

When using residual income, some companies prefer to use the weighted average cost of capital as a basis for determining the imputed interest charge.

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