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Providence LLC has the following information for one of its divisions: Average operating assets $2,000,000 Sales $500,000 Return on investment (ROI) 20% Providence has a

Providence LLC has the following information for one of its divisions:

Average operating assets

$2,000,000

Sales

$500,000

Return on investment (ROI)

20%

Providence has a cost of capital of 13%, and this division has operating income of $400,000. The division's residual income is

a) $260,000

b) ($260,000)

c) $1,740,000

d) $140,000

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