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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
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 $182,600 830,000 Retail Division Commercial Division 108,000 450,000 Internet Division 186,300 690,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Income from operations $182,600 Commercial Division $108,000 45,000 X Internet Division $186,300 69,000 x Minimum acceptable of income from operations 83,000 X Residual income 99,600 X $ 63,000 X $ 117,300 X b. Which division has the most residual income? Retail Division X
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