Compute the Residual Income for the Hi Ho Investment Center

Multiple Choice

Compute the residual income for the Hi Ho investment center as shown below. $\begin{array}{lr} & \text { Hi Ho Subsidiary } \\\text { Total sales } & \$ 20,000 \\\text { Operating income } & \$ 4,300 \\\text { Beginning assets invested } & \$ 14,000 \\\text { Ending assets invested } & \$ 16,000 \\\text { Average assets invested } & \$ ? \\\text { Desired ROI } & 25 \% \\\text { Residual income } & \$ ?\end{array}$

A) $550
B) $3,050
C) $4,300
D) $1,800