The sales, income from operations, and invested assets for each division of Wren Company are as follows: 
Management has established a minimum rate of return for invested assets of 8%.
a) Determine the residual income for each division.
b) Based on residual income, which of the divisions is the most profitable?
Definitions:
Inferior Good
A type of good for which demand decreases as the income of the consumer increases, typically because consumers will choose higher quality substitutes when they can afford them.
Demand Curve
A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope from left to right.
Elasticity of Demand
A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the good's sensitivity to price changes.
City Revenues
The income generated by a municipality from sources like taxes, fees, and grants which is used to fund public services.
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