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The income from operations and the amount of invested assets in each division of Devon Industries...

The income from operations and the amount of invested assets in each division of Devon Industries are as follows:

Income from Operations Invested Assets
Sporting Goods Division $134,900 710,000
Health Care Division 84,800 530,000
Commercial Division 37,800 270,000

a. Compute the rate of return on investment for each division. (Round to the nearest whole number.)

Division Percent
Sporting Goods Division %
Health Care Division %
Commercial Division %

b. Which division is the most profitable per dollar invested?

The income from operations and the amount of invested assets in each division of Devon Industries are as follows:

Income from Operations Invested Assets
Sporting Goods Division $160,600 730,000
Health Care Division 105,000 420,000
Commercial Division 113,400 630,000

Assume that management has established a 8% minimum acceptable rate of return for invested assets.

a. Determine the residual income for each division.

Sporting Goods Division Health Care Division Commercial Division
Income from operations $160,600 $105,000 $113,400
Minimum amount of income from operations
Residual income $ $ $

b. Which division has the most residual income?

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