Plum Partners are considering the purchase of a small bakery that appears to be performing well and would complement Plum Partners current operations. Information for the bakery follows:

Sales	$101,250
Contribution Margin	$36,500
Total Fixed Costs	$15,200
Beginning Operating Assets	$42,500
Ending Operating Assets	$51,500
Required Rate of Return	18.00%

What is the residual income of the bakery?

Multiple Choice

• $12,840

• ($25,700)

• $41,090

• $12,030