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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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