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The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7 %.

The Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of

7

​%.

Management calculated a

weightedminus

average

cost of capital​ (WACC) of

3

​%.

​Allied's corporate tax rate is

30

​%.

Sales

$ 500 comma 000

Operating income

125 comma 000

Total assets

1 comma 700 comma 000

Current liabilities

300 comma 000

What is the​ division's Residual Income​ (RI)?


A.

$ 37 comma 500


B.

$ 6 comma 000


C.

$ 74 comma 000


D.

$ 90 comma 000

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