Tomlinson Tech Has a Cost of Capital of 8 Percent

Multiple Choice

Tomlinson Tech has a cost of capital of 8 percent, a required rate of return of 9.5 percent, and an income tax rate of 30 percent.The Consumer Division of Tomlinson Tech has assets totaling $2,800,000 and current liabilities at $180,000 with $40,000 of this amount being interest-bearing.Sales for the year totaled $1,900,000 and interest expense totaled $20,000.Net income was $166,500 for the year.How much is the Consumer Division's residual income/(loss) ?

A) ($32,300)
B) ($72,200)
C) ($46,300)
D) None of these answer choices are correct.