ch 24 7

Residual Income The income from operations and the amount of invested assets in each division of Shiner Industries are as follows: Invested Income from Operations Assets Retail Division $320,000 $60,800 79,800 Commercial Division 380,000 Internet Division 82,800 360,000 Assume that management has established an 8% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $60,800 $79,800 $82,800 Minimum amount of income from operations Residual income b. Which division has the most residual income? Internet Division