Shrewsbury Inc The Company's Minimum Required Rate of Return Is 14

Multiple Choice

Shrewsbury Inc. reported the following results from last year's operations: At the beginning of this year, the company has a $800,000 investment opportunity with the following characteristics:
$\begin{array}{lc}\text { Sales } & \$ 2,480,000 \\\text { Contribution margin ratio } & 40 \% \text { of sales } \\\text { Fixed expenses } & \$ 868,000\end{array}$ The company's minimum required rate of return is 14%.
The residual income for this year's investment opportunity when considered alone is closest to:

A) $124,000
B) $12,000
C) $0
D) $108,800