12. Samy, Director of Division B, has full autonomy to make decisions involving better cost management and investments. The following data is for Division B's forecast for the year 2022:

Average active balance: $600,000 Total fixed cost: $250,000 Variable unit cost: $20 Sales volume: 25,000 units

Unit selling price: $35

The company requires a minimum rate of return of 8%. They will promote Samy if Division B has a net residual income (NRI) of $100,000 in 2022. If Samy wants to get his promotion, what should he do to the total fixed cost of his Division B?

a) reduce it by $20,000

b) No answer is appropriate

c) reduce it by $250,000

d) reduce it by $100,000

e) keep it the same