The standard way of calculating residual income can lead to confusion because it mixes different values. By using a capital charge based on economic return, we can make residual income consistent and easy to understand. This new method helps us accurately measure how efficiently a project or company is using its capital. It ensures that all financial numbers match up, whether we're looking at income, values, rates, or costs. In simple terms, economic residual income is a reliable tool for evaluating economic efficiency.