Herb Corporation Has Provided the Following Information What Is Herb Corporation's Residual Income?
A) $74,000
B) $62,000

Multiple Choice

Herb Corporation has provided the following information:
$$\begin{array} { | l | l | } \hline \text { Current assets } & \$ 200,000 \\\hline \text { Total assets } & \$ 750,000 \\\hline \text { Total liabilities } & \$ 300,000 \\\hline \text { Current liabilities } & \$ 100,000 \\\hline \text { Weighted average cost of capital } & 10 \% \\\hline \text { Operating income } & \$ 140,000 \\\hline \text { Target rate of return } & 12 \% \\\hline \text { Income tax rate } & 40 \% \\\hline\end{array}$$ What is Herb Corporation's residual income?

A) $74,000
B) $62,000
C) $50,000
D) $65,000