Reef Corphas Revenues of $500,000 Resulting in an Operating Income of of $54,000.Invested

Multiple Choice

Reef Corp.has revenues of $500,000 resulting in an operating income of $54,000.Invested assets total $600,000,the cost of capital is 6%.Calculate the increase in residual income if sales increase by 10% and the profit margin and invested assets remain the same.

A) $5,400
B) $24,000
C) $0
D) $7,500