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Sunland Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center.

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Sunland Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales $3,320.000 Sales revenue $10,080,000 $4,030.000 Variable expenses 4,030,000 1,580,000 1,880,000 Direct fixed expenses 4,530,000 1.080,000 1.280,000 Average assets 8,030,000 4,030,000 1,650.000 Required rate of return 12% 12% 12% The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost $880,000 and is expected to generate $ 163,000 in additional annual segment margin. Calculate the residual income of each distribution channel assuming it purchases the new customer relationship management system. If the residual income is a loss then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, eg: (5,1251) Residual income $ Retail $ Online $ Catalog

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