Residual Income

The income from operations and the amount of invested assets in each division of Beck Industries are as follows:

	Income from Operations		Invested Assets
Retail Division	$70,200		$390,000
Commercial Division	67,500		450,000
Internet Division	91,000		700,000

Assume that management has established a 12% minimum acceptable return for invested assets.

a. Determine the residual income for each division.

Residual Income The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets $390,000 Retail Division Commercial Division $70,200 67,500 91,000 450,000 700,000 Internet Division Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Internet Division Retail Division $70,200 Commercial Division $67,500 Income from operations $91,000 Minimum acceptable income from operations as a percent of invested assets Residual income b. Which division has the most residual income