The Northern Division of the Gordon Company Reported the Following

Multiple Choice

The Northern Division of the Gordon Company reported the following data for last year:
$\begin{array}{|r|r|}\hline \text { Sales } & \$ 900,000 \\\hline \text { Shareholders' Equity } & \$ 320,000 \\\hline \text { Operating Expenses } & \$ 700,000 \\\hline \text { Average Operating Assets } & \$ 500,000 \\\hline \text { Interest Expense } & \$ 50,000 \\\hline \text { Tax Expense } & \$ 60,000 \\\hline \text { Minimum Required Rate of Return } & 15 \% \\\hline\end{array}$



-What was the residual income for the Northern Division last year?

A) $48,000.
B) $90,000.
C) $125,000.
D) $135,000.