ABC IncHas the Following Information Available for One of Its Divisions

Multiple Choice

ABC Inc.has the following information available for one of its divisions:
$\begin{array}{lr} \text { Average operating assets} &\$5000000\\ \text { Return on investment (ROI) } &4\%\\ \text { Sales } &\$8000000\\\end{array}$

If ABC requires a minimum return on its investments of 25 per cent,what is their residual income?

A) $1 950 000
B) $4 500 000
C) $6 750 000
D) $ 750 000