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The Western Division of Claremont Company had net operating income of $147,000 and average invested assets of $559,000. Clare

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Current    Situation Add: Proposed Situation Total
a Current Operating Income $147,000 $33,000 $180,000
b Average Invested assets $559,000 $88,000 $647,000
c Current rate of return (a/b*100) 26.3% 27.8%
d Required rate of return 14.5% 14.5%
e Residual income(c-d)*b 65945 86185
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