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Determine the residual income for each division

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Residual Income Question -

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

$149,100

$710,000

Commercial Division

91,800

510,000

Internet Division

80,000

500,000

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

a. Determine the residual income for each division.

b. Which division has the most residual income?

A. Commercial Division

B. Internet Division

C. Retail Division

Reference no: EM132510880

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