The Following Information Is Available for Applegate Company Invested Capital Is Defined as Total Assets Less Current Liabilities

The following information is available for Applegate Company:
$\begin{array}{llll}\text { Current assets } & \$ 100,000 & \text { Current liabilities } & \$ 175,000 \\\text { Property, plant and } & & \text { Long-term liabilities } & 100,000 \\\text { equipment } & 150,000 & \text { Stockholders'equity } & \underline{25,000}\\\text { Other assets } & {50,000}&\text { Total liabilities and }\\\text { Total assets } & \$ 300,000&\text { stockholders'equity }&\$ 300,000\end{array}$
Invested capital is defined as total assets less current liabilities.The after-tax operating income is $150,000.The after-tax cost of capital is 20%.The before-tax operating income is $200,000.What is the residual income?

A) $90,000
B) $120,000
C) $125,000
D) $175,000