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 $46,800 $260,000 Commercial Division 116,000 580,000 Internet Division 84,000 600,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $46,800 $116,000 $84,000 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? Commercial Division
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 $46,800 $260,000 Commercial Division 116,000 580,000 Internet Division 84,000 600,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $46,800 $116,000 $84,000 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? Commercial Division
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | $46,800 | $260,000 | ||
| Commercial Division | 116,000 | 580,000 | ||
| Internet Division | 84,000 | 600,000 |
Assume that management has established a 12% minimum acceptable
a. Determine the residual income for each division.
| Retail Division | Commercial Division | Internet Division | ||||
| Income from operations | $46,800 | $116,000 | $84,000 | |||
| 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?
Commercial Division
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