Cantt Duet Manufacturing Company has provided the following financial information:

Sales

$400,000

Variable Expenses

$250,000

Fixed Expenses

$50,000

Investment in Fixed Assets

$300,000

Required Rate of Return

5%

What is Cantt's residual income?

Group of answer choices

1) $95,000

2)$15,000

3) $85,000

4)$100,000

5)$80,000