Residual Income The income from operations and the amount of invested assets in each division...
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Accounting
Residual Income
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 | $169,400 | $770,000 | ||
| Commercial Division | 132,000 | 660,000 | ||
| Internet Division | 109,800 | 610,000 | ||
Assume that management has established a 8% minimum acceptable return for invested assets.
a. Determine the residual income for each division.
| Retail Division | Commercial Division | Internet Division | |||||||
| Income from operations | $169,400 | $132,000 | $109,800 | ||||||
| Minimum acceptable income from operations as a percent of invested assets | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | ||||||
| Residual income | $fill in the blank 4 | $fill in the blank 5 | $fill in the blank 6 | ||||||
b. Which division has the most residual income?
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