The following information is available for Applegate Company:

Invested capital is defined as total assets less current liabilities. The after-tax operating income is $150,000. The after-tax cost of capital is 20%. The before-tax operating income is 200,000. What is the residual income?

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27) The following information is available for Applegate Company: $100,000 Current assets Property, plant and equipment Other assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total liabilities and stockholders' equity $175,000 100,000 25,000 150,000 50,000 $300,000 $300,000 Invested capital is defined as total assets less current liabilities. The after-tax operating income is $150,000. The after-tax cost of capital is 20%. The before-tax operating income is $200,000. What is the residual income? A) $125,000 B) $175,000 C) $90,000 D) $120,000