Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for...
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Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales $34,680,000 $31,320,000 Operating income 2,680,300 1,254,700 Operating assets, January 1 6,399,000 5,740,000 Operating assets, December 31 7,600,000 6,780,000 Forchen, Inc., requires an 7 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ 2. Calculate residual income for the Cleaning Products Division. $ 3. What if the minimum required rate of return was 8 percent? How would that affect the residual income of the two divisions? Small Appliances Division residual income would be Cleaning Products Division residual income would be
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