4) Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 20% and the weighted average cost of capital is 30%. Its effective tax rate is 40%. Sales Operating income Total assets Currentliabilities $5,000,000 1,250,000 1,000,000 750,000 What is the division's Residual Income (RI)? B) $420,000 A) $1,050,000 C) $2,000,000 D) $950,000