Lambda Division Had the Following Information: Asset Base in Lambda

Multiple Choice

Lambda Division had the following information: Asset base in Lambda Division $400,000
Net income in Lambda Division $50,000
Weighted average cost of capital 12%
Target ROI 15%
Margin for Lambda Division 20%
What is the residual income for Lambda Division?

A) $(10,000)
B) $48,000
C) $7,500
D) $60,000