How to solve

Assume division $1$ of the XYZ Company had the following results last year $($in thousands$).$

Management's required rate of return is $8\%$ and the weighted average cost of capital is $6\%.$

Its effective tax rate is $30\%.$

What is the division's residual income?

$$100,000$

$$200,000$

$$500,000$

$$540,000$