A Company's Current Net Operating Income Is $16,800 and Its

Multiple Choice

A company's current net operating income is $16,800 and its average operating assets are $80,000.The company's required rate of return is 18%.A new project being considered would require an investment of $15,000 and would generate annual net operating income of $3,000.What is the residual income of the new project?

A) 20.8%
B) 20%
C) ($150)
D) $300