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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

  1. 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 $98,800 $520,000
    Commercial Division 134,300 790,000
    Internet Division 87,400 380,000

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

    a. Determine the residual income for each division.

    Retail Division Commercial Division Internet Division
    Income from operations $98,800 $134,300 $87,400
    Minimum acceptable income from operations as a percent of invested assets
    Residual income $ $ $

    b. Which division has the most residual income? Internet Division

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