Use the Information Below to Answer the Following Question(s)

Multiple Choice

Use the information below to answer the following question(s) :
Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands) . Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%.

-What is the First Electronics Corporation cell phone division's Residual Income (RI) ?

A) $472,500
B) $600,000
C) $690,000
D) $300,000