The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).
Sales $ 4,500,000
Operating income $ 675,000
Total assets $ 3,000,000
Current liabilities $ 250,000
Management's target rate of return is 12% and the weighted average cost of capital is 9%.
What is the Top Hat Division's Residual Income (RI)?
a. $ 135,000
b. $ 405,000
c. $ 225,000
d. $ 315,000