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Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center.

Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $10,020,000 $3,970,000 $3,200,000 Variable expenses 3,970,000 1,520,000 1,820,000 Direct fixed expenses 4,470,000 1,020,000 1,220,000 Average assets 7,970,000 3,970,000 1,710,000 Required rate of return 11% 11% 11% The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost $820,000 and is expected to generate $157,000 in additional annual segment margin. Calculate the residual income of each distribution channel assuming it purchases the new customer relationship management system. (If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Retail Online A Catalog Residual Income A +A

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