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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
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 $10.130,000 $4,080.000 $3.400,000 Variable expenses 4.080,000 1,630,000 1.930,000 Direct fixed expenses 4.580,000 1,130,000 1,330,000 Average assets 8.080.000 4,080.000 1,600,000 Required rate of return 10% 10% 10% (a) Your answer is correct Calculate the current residual income for each distribution channel of the residual income is a loss then enter with t preceding the number, es-5.125 or parenthesis (5.125) Residual Income thi $ 642000 Retail Online $ 912000 $ 20000 Catalog eTextbook and Media Attempts: 2 of 3used 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 $930,000 and is expected to generate $168.000 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 lous then tive sign preceding the 44-5125 or 125 Residual income Retall O Catalog
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