Vaughan Company has 3 divisions with the following information: Division A Division B Division C Sales $750,000 $700,000 $360,000 Net Operating Income $30,000 $35,000 $36,000 Average Operating Assets $200,000 $500,000 $300,000 Minimum Required Rate of Return 8% 15% 9% Which of the following statements is true? 1. Division A's residual income is $14,000 2. Division B's residual income is $(40,000) 3. Division C's residual income is $9,000 All of the Statements are true Only Statement #2 Only Statement #3 Only Statement #1 Both Statement #2 and #3 All of the Statements are false