The Beverage Division of Natural Foods Corporation Had Sales of $4,200,000

Multiple Choice

The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year.The total assets of the Beverage Division were $1,680,000,while current liabilities were $360,000.Natural Foods Corporation's target rate of return is 9%,while its weighted average cost of capital is 7%.The effective tax rate for the company is 40%.
-What is the Beverage Division's Residual Income (RI) ?

A) $722,400
B) $688,800
C) $411,600
D) $151,200