Austin Company Austin Company Has Established a Target Rate of Return of Return

Multiple Choice

Austin Company
Austin Company has established a target rate of return of 15% for all divisions.For the most recent year,Waterloo Division generated sales of $12,000,000 and expenses of $9,000,000.Total assets at the beginning of the year were $7,000,000 and total assets at the end of the year were $9,000,000.
Refer to Austin Company.In the most recent year,what was Waterloo Division's residual income?

A) $1,200,000
B) $1,650,000
C) $1,800,000
D) $1,950,000