Computation of a residual income

A corporation has provided the following data-

Return on investment (ROI) |
15% |

Sales |
$120,000 |

Average operating assets |
$60,000 |

Minimum required rate of return |
12% |

Margin on sales |
7.5% |

The corporation's residual income is-

**a) **$1,800

**b) **$5,400

**c) **$2,700

**d) **$3,600

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