Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each
distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:
Retail Stores Internet
Catalog Sales
Sales revenue
$9,910,000
$3,860,000
$3,010,000
Variable expenses
3,860,000
1,410,000
1,710,000
Direct fixed expenses
4,360,000
910,000
1,110,000
Average assets
7,860,000
3,860,000
1,960,000
Required rate of return
11%
11%
11%
(a)
Calculate the current residual income for each distribution channel. (If the residual income is a loss then enter with a negative
sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).)
Residual Income
$
Retail
$
Online
$
Catalog