Question
Cullumber Decor sells home decor items through three distribution channelsretail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center.
Cullumber Decor sells home decor items through three distribution channelsretail 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
$12,703,200 $3,740,000 $7,474,000
Variable expenses
4,020,000 1,355,000 1,990,000
Direct fixed expenses
6,650,688 1,012,420 4,930,924
Average assets
8,040,000 3,740,000 2,020,000
Required rate of return
12% 12% 12%
Calculate the current residual income for each distribution channel. (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).)
Residual Income Asset Turn Over Ratio
Retail
$________ _____
Online
$_________ _______
Catalog
$_______ _______
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