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	$48,000		$240,000
Commercial Division	76,500		450,000
Internet Division	43,500		290,000

Assume that management has established a 10% minimum acceptable return for invested assets.

a. Determine the residual income for each division.

	Retail Division			Commercial Division			Internet Division
Income from operations	$48,000			$76,500			$43,500
Minimum acceptable income from operations as a percent of invested assets
Residual income	$			$			$

b. Which division has the most residual income?