Arkansas Company Arkansas Co

Multiple Choice

Arkansas Company Arkansas Co.has established a target rate of return of 16% for all divisions.For the most recent year,Little Rock Division generated sales of $10,000,000 and expenses of $7,500,000.Total assets at the beginning of the year were $5,000,000 and total assets at the end of the year were $7,000,000.
Refer to Arkansas Company.In the most recent year,what was Little Rock Division's residual income?

A) $ 960,000
B) $1,380,000
C) $1,540,000
D) $1,700,000