The Management of Mullen Division Has Provided the Following Information

Multiple Choice

The management of Mullen Division has provided the following information:
Total assets: $600,000
Operating income: $90,000
Sales: $300,000
Management is considering investing in an additional project costing $60,000; it is estimated that the project will create operating income of $7,200. Mullen's minimum acceptable rate of return is 10%. How much is Mullen's overall residual income if the investment is made?

A) $31,200
B) $1,200
C) $61,200.
D) $47,200