Question 4 Requirement 1 The Rainy Division of Seattle Corporation reported the following results from the past year. Shareholders require a return of 11%. Management calculated a weighted - average cost of capital (WACC) of 3%. Rainy's corporate tax rate is 25%. Sales $800,000 Operating income 240,000 Total assets 1,600,000 Current liabilities 300,000 What is the division's Residual Income (RI)? O A. $152,000 OB. $88,000 O C. $64,000 OD. $240,000 Requirement 2 The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Sales $4,800,000 Operating income $720,000 Total assets $4,000,000 Current liabilities $230,000 Management's target rate of return is 16% and the weighted average cost of capital is 13%. What is the Top Hat Division's capital turnover? O A. 1.2 O B. 5.6 OC. 20.9 OD. 6.7