Pankey Incorporated Has a $700,000 Investment Opportunity That Would Involve

Multiple Choice

Pankey Incorporated has a $700,000 investment opportunity that would involve sales of $1,050,000, a contribution margin ratio of 40% of sales, and fixed expenses of $325,500. The company's minimum required rate of return is 18%. The residual income for this year's investment opportunity is closest to:

A) ($31,500)
B) $0
C) $94,500
D) $126,000