Sullivan Company has three divisions, Larry, Moe, and Curly. The company has a hurdle rate of 7.01 percent. Selected operating data of the three divisions follow:
|
|
Larry |
|
Moe |
|
Curly |
| Sales |
$ |
336,000 |
$ |
229,000 |
$ |
317,000 |
| Cost of goods sold |
|
207,000 |
|
123,000 |
|
193,000 |
| Miscellaneous operating expenses |
|
39,000 |
|
31,000 |
|
34,000 |
| Allocated corporate expenses |
|
20,000 |
|
20,000 |
|
11,000 |
| Average invested assets |
|
1,250,000 |
|
930,000 |
|
1,125,000 |
Compute the residual income for each division.
|