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The operating income and the amount of invested assets in each division of Sadie Industries are as follows: Operating Income Invested Assets Retail Division $4,000,000
The operating income and the amount of invested assets in each division of Sadie Industries are as follows: Operating Income Invested Assets Retail Division $4,000,000 Commercial Division 6,375,000 $20,000,000 37,500,000 900,000 Internet Division 135,000 Assume that management has established a 10% minimum acceptable rate of return for invested assets. a. Determine the residual income for each division. Operating income Minimum acceptable operating income as a percent of invested assets Residual income b. Which division has the most residual income? Commercial Division Retail Division Commercial Division Internet Division 4,000,000 6,375,000 $ 135,000 $
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