University Hospital provided the following segment margin income statements for two of its divisions: Diagnostic and Outpatient.Both divisions are structured as investment centers. 
The average assets for the Diagnostic and Outpatient divisions total $400,000 and $600,000, respectively.The required minimum rate of return for both divisions is 10%.
Required:
a.Calculate the current residual income for each division.
b.Why is residual income a better measure of performance for managers of investment centers than the overall profit compared to the flexible budget?
Definitions:
Impairments
A reduction in the normal function of physical or mental abilities.
Personality
Unique patterns of thoughts, emotions, and behaviors that define how an individual perceives and interacts with the world.
Psychopaths
are individuals characterized by antisocial behavior, lack of empathy and remorse, and bold, disinhibited, and egotistical traits.
Collectivist Societies
Societies that prioritize the group over the individual, emphasizing community, cooperation, and interdependence.
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