Last Year, Green Thumb's Residential Division Reported Sales of $950,000

Multiple Choice

Last year, Green Thumb's Residential Division reported sales of $950,000, interest expense of $100,000, and net income of $126,000.The company's tax rate is 30 percent, and it has an 8 percent cost of capital and a 9 percent required rate of return.Residential Division has noninterest-bearing current liabilities that total $75,000 and it has total assets of $820,000.How much is the Residential Division's residual income/(loss) ?

A) $136,400
B) $128,950
C) $96,400
D) ($3,600)