The sales, operating income, and invested assets for each division of Salem Company are as follows:

SalesOperating

IncomeInvested

AssetsDivision C$4,000,000$410,000$3,500,000Division D3,500,000600,0004,000,000Division E2,250,000780,0007,000,000

Management has established a minimum rate of return for invested assets of 11%.

a.Determine the residual income for each division.

Residual Income

Division C $

Division D $

Division E $