Figure 12-2

Multiple Choice

Figure 12-2. The manager of Stock Division projects the following for next year:
The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income.The company's minimum rate of return is 14%.
Refer to Figure 12-2.What is the residual income for Stock Division with the additional project?

A) $40,000
B) $6,000
C) $7,900
D) $4,200
E) $25,600