Pharoah 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:

$($a$)$

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, eg$.-5,125$ or parenthesis, e$.$g$.(5,125).)$

Residual Income

Retail $

Online $

Catalog $

eTextbook and Media

Attempts: $0$ of $3$ used

$($b$)$

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

$$860,000$ and is expected to generate $$161,000$ 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 $