Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate...
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Accounting
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.26 percent. Selected operating data for the three divisions follow:
Peak
View
Grand
Sales revenue
$
330,000
$
238,000
$
309,000
Cost of goods sold
216,000
112,000
183,000
Miscellaneous operating expenses
37,000
35,000
36,000
Average invested assets
1,360,000
880,000
1,115,000
2. Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Round your answers to nearest whole dollar.)
Peak View Grand Residual Income (Loss)
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