Duncan Ltd Duncan Requires Each of Its Divisions to Generate a Minimum

Multiple Choice

Duncan Ltd.has the following information available for one of its divisions in the current year:
$\begin{array}{lr}\text { Sales revenue } & \$ 6000000 \\\text { Operating expenses } & 3800000 \\\text { Average operating assets } & 2000000\end{array}$
Duncan requires each of its divisions to generate a minimum return of 25 per cent.What is this division's residual income?

A) $ 200 000
B) $1 450 000
C) $1 700 000
D) $5 500 000