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	$113,400		$540,000
Commercial Division	102,600		540,000
Internet Division	65,000		260,000

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	$113,400			$102,600			$65,000
Minimum acceptable income from operations as a percent of invested assets
Residual income