Chapter 9, Problem 11E

(a)

To determine

Residual income: The remaining income from operations after deducting the desired acceptable income is referred to as residual income.

Formula of residual income:

Income from operations	XXX
Less minimum acceptable income from operations as a percent of invested assets	XXX
Residual income	XXX

Table (1)

Residual income of for each division

(b)

To determine

The division with highest residual income.