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Providence LLC has the following information for one of its divisions:
| Average operating assets | $2,000,000 |
| Sales | $500,000 |
| Return on investment (ROI) | 20% |
Providence has a cost of capital of 13%, and this division has operating income of $400,000. The division's residual income is
a) $260,000
b) ($260,000)
c) $1,740,000
d) $140,000
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