The Herbert Division of PNY Reported Net Profit of $2,500

Multiple Choice

The Herbert Division of PNY reported net profit of $2,500, operating profit of $4,000, average equity of $24,000, and average operating assets of $30,000 in a recent accounting period. If Herbert's required rate of return is 12%, its residual income was:

A) $(380)
B) $400
C) $380
D) $1,100