Forchen, inc., provided the following information for two of its divisions for last year:

small appliances
division cleaning products
division
sales $34,680,000 $31,390,000
operating income 2,531,400 1,252,000
operating assets, january 1 6,397,000 5,710,000
operating assets, december 31 7,490,000 6,690,000
forchen, inc., requires an 8 percent minimum rate of return.

required:

1. calculate residual income for the small appliances division.

$

2. calculate residual income for the cleaning products division.

$

3. what if the minimum required rate of return was 9 percent? how would that affect the residual income of the two divisions?

small appliances division residual income would be (higher/ lower/ unaffected)?
cleaning products division residual income would be (higher/ lower/ unaffected)?

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d) social security number

let me know if i am correct or not, so i can edit the answer.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.