Residual income

The operating income and the amount of invested assets in each division of Stewart Industries are as follows:

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

a$.$ Determine the residual income for each division.

b$.$ Which division has the most residual income?Residual income

The operating income and the amount of invested assets in each division of Stewart Industries are as follows:

Operating Income Invested Assets

Retail Division $$84,600$ $$470,000$

Commercial Division $104,000650,000$

Data Analytics Division $94,600430,000$

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

a$.$ Determine the residual income for each division.

Line Item Description Retail Division Commercial Division Data Analytics Division

Operating income $$84,600$ $$104,000$ $$94,600$

Minimum amount of operating income fill in the blank $1$ fill in the blank $2$ fill in the blank $3$

Residual income $fill in the blank $4$ $fill in the blank $5$ $fill in the blank $6$

b$.$ Which division has the most residual income?