The Frasier Company acquired a 45% interest in Holiday Enterprises for $2,500,000 and appropriately applied the equity method. During the first year, Holiday reported net income of $625,000 and paid cash dividends totaling $125,000.What amount will The Frasier Company report regarding its Holiday investment at the end of the first year on its Income Statement?

A. Investment earnings totaling $500,000

B. Investment earnings totaling $281,250

C. Investment earnings totaling $225,000

D. Dividend income totaling $56,250