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Minor & Neece, Ltd., operates retail clothing stores in Nashville, Knoxville, and Memphis, Tennessee. Each store is evaluated as an investment center. Selected results from
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 $5,065.000 2,067,000 2,067,000 4,000,000 14% 8% 30% Knoxville $8,089,000 4,807,000 2.422.000 5,000,000 14% 8% 30% Memphis $2,059,000 1,005,000 802.000 1,600,000 14% 8% 30% (a) 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. eg. (5,125).) Nashville Knoxville Memphis Residual income $ $ $
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