Anas Service Co. is a computer service center. For the month, Anas had the following operating statistics:

Sales                          $450,000

Operating income           25,000

Net profit after taxes         8,000

Total assets                  500,000

Shareholders’ equity    200,000

Cost of capital                     6%

Based on the above information, which one of the following statements is true? Anas has a

A.Return on investment of4%.

(B.Residual income of $(5000.

C.Return on investment of1.6%.

(D.Residual income of $(22,000.