Davis Company has established a target rate of return of $15\%$ for all divisions. For the most recent year, Waterloo Division generated sales of $$12,000,000$ and expenses of $$9,000,000.$ Total assets at the beginning of the year were $$7,000,000$ and total assets at the end of the year were $$9,000,000.$

Refer to Davis Company. In the most recent year, what was Waterloo Division's residual income?

Select one:

a$.$ $$1,200,000$

b$.$ $$1,650,000$

c$.$ $$1,950,000$

d$.$ $$1,800,000$