(Answered) The sales income from operations and invested assets for

Accounting

The sales, income from operations, and invested assets for each division of Winston Company are as follows:

	Sales	Income from Operations	Invested Assets
Division C	$5,000,000	$630,000	$3,900,000
Division D	6,800,000	760,000	4,300,000
Division E	3,750,000	750,000	7,250,000

Management has established a minimum rate of return for invested assets of 8%.

(a)	Determine the residual income for each division.

(b)	Based on residual income, which of the divisions is the most profitable?

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