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	$160,600		$730,000
Commercial Division	205,000		820,000
Internet Division	202,800		780,000

Assume that management has established a 8% minimum acceptable return for invested assets.

a. Determine the residual income for each division.

	Retail Division			Commercial Division			Internet Division
Income from operations	$160,600			$205,000			$202,800
Minimum acceptable income from operations as a percent of invested assets
Residual income	$			$			$

b. Which division has the most residual income?