Exhibit 11-3
Dillon Company Has the Following Information Available for One

Multiple Choice

Exhibit 11-3
Dillon Company has the following information available for one of its divisions:
$\begin{array}{lr}\text { Average operating assets } & \$ 4,000,000 \\\text { Sales } & \$ 4,800,000 \\\text { Return on investment (ROI) } & 30 \%\end{array}$
-Refer to Exhibit 11-3.If Dillon's cost of capital is 25%,what is the division's residual income?

A) $ 200,000
B) $800,000
C) $440,000
D) $1,200,000
E) None of the answer choices is correct.