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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: Retail Division Income from
Residual Income The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Retail Division Income from Operations Invested Assets $5,400,000 $30,000,000 6,250,000 25,000,000 1,800,000 12,000,000 Commercial Division Internet Division Assume that management has established a 9% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Internet Division Commercial Division $6,250,000 Income from operations $5,400,000 $1,800,000 Minimum acceptable income from operations as a percent of invested assets Residual income b. Which division has the most residual income? Commercial Division
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