Minor & Neece, Ltd., operates retail clothing stores in Nashville, Knoxville, and Memphis, Tennessee. Each store is evaluated as an investment center. Selected results from the latest year are as follows. Sales Variable expenses Direct fixed expenses Assets Required rate of return Weighted average cost of capital Tax rate Nashville $5,083,000 2,094,000 2,094,000 4,000,000 Knoxville $8,067,000 4,838,000 2,470,000 5,000,000 14% 8% 30% Memphis $2,006,000 1,052,000 844,000 1,600,000 14% 8% 14% 8% 30% 30% (a) Your answer is correct. Calculate the residual income for each of the three stores. (If the residual income is a loss then enter with a negative sign preceding the number e.g. -15,000 or parenthesis. e.g. (5,125).) Nashville Knoxville Memphis (a) Your answer is correct. Calculate the residual income for each of the three stores. (If the residual income is a loss then enter with a negative sign preceding the number e.g.-15,000 or parenthesis. e.g. (5,125).) Nashville Knoxville Memphis Residual income $ 335000 $ 59000 - 114000 e Textbook and Media Assistance Used Attempts: 1 of 3 used Your answer is correct. The corporate office is giving the stores the option of purchasing a new inventory management system. The new system will cost the stores $112,000; they can expect a $15,500 increase in their annual segment margins. Calculate the residual income using the new inventory system (If the residual income is a loss then enter with a negative sign preceding the number e.g. -15,000 or parenthesis. e.g. (5,125).) Residual Income Nashville $ 334820 Knoxville $ 58820 Memphis $ -114180 If store managers are evaluated based on residual income, which stores will invest in the new inventory management system? Nashville and Knoxville v e Textbook and Media Nashville and Knoxville e Textbook and Media Attempts: 2 of 3 used (c) What is the EVA of the new inventory management system? EVA $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit