Holt Company Ltd determined residual income for the year of $22 000. The company's cost of capital was 12 per cent, the investment turnover was 2.0, and capital invested was $400 000. What was Holt Company's profit during the year?

A) $26 000
B) $48 000
C) $74 000
D) $70 000

Residual Income

The amount of net income left over for a business after it has paid out dividends to its shareholders, often used as a measure of corporate and project profitability.

Investment Turnover

A financial ratio comparing the sales revenue a company generates to its current investment in assets, indicating efficiency in using investments to produce sales.

Cost Of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and satisfy its investors.