1. 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	$51,300		270,000
   Commercial Division	101,200		460,000
   Internet Division	82,500		550,000

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

   a. Determine the residual income for each division.

   	Retail Division			Commercial Division			Internet Division
   Income from operations	$51,300			$101,200			$82,500
   Minimum acceptable of income from operations
   Residual income	$			$			$

   b. Which division has the most residual income?

   • Commercial Division
   • Retail Division
   • Internet Division