1. Meade Corp has the following operating data for the past 2 years:

Year 1

Year 2

Return on Investment

10%

20%

Residual Income

?

$25,000

Required Rate of return

8%

10%

Sales

$400,000

$500,000

Asset Turnover

?

?

The sales margin in year 2 is twice the margin for the first year.

The Company had the same asset turnover in both years.
What is the residual income in year1?
A.	$4,000
B.	$8,000
C.	$10,000
D.	$12,000
E.	None of the above