Answer the Following Questions Using the Information Below:
Care Inc

Multiple Choice

Answer the following questions using the information below:
Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results:
$$\begin{array} { l r r } & \text { North } & \text { South } \\\text { Sales } & \$ 6,000,000 & \$ 5,000,000 \\\text { Operating income } & 1,500,000 & 1,200,000 \\\text { Taxable income } & 1,200,000 & 700,000 \\\text { Investment } & 14,000,000 & 10,000,000\end{array}$$ The company's desired rate of return is 10%. Income is defined as operating income.
-What are the respective residual incomes for the North and South Divisions?

A) $60,000 and $100,000
B) $300,000 and $60,000
C) $300,000 and $100,000
D) $100,000 and $200,000