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Ivanhoe 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.

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Ivanhoe 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 $ 9.930,000 $ 3,880,000 $ 3,030,000 Variable expenses 3.880,000 1,430,000 1,730,000 Direct fixed expenses 4,380.000 930,000 1,130,000 Average assets 7,880,000 3,880,000 1,980,000 Required rate of return 11% 11% 11%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 LA Retail Online $ CatalogThe 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 $ 730,000 and is expected to generate $ 148,000 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).) Residual Income $ Retail $ Online Catalog

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