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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
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: Retail Stores Internet Catalog Sales Sales revenue $9,950,000 $3,900,000 $3,060,000 Variable expenses 3,900,000 1,450,000 1,750,000 Direct fixed expenses 4,400,000 950,000 1,150,000 Average assets 7,900,000 3,900,000 1,710,000 Required rate of return 12% 12% 12% (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, e.g. -5,125 or parenthesis, e.g. (5,125).) Residual Income $ Retail $ Online $ Catalog
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