Financial data for Bridger, Inc., for last year are as follows:
The company paid dividends of $197,000 last year. The €œInvestment in Brier Company€ on the balance sheet represents an investment in the stock of another company.

Required:
1. Compute the company€™s margin, turnover, and return on investment (ROI) for last year.
2. The board of directors of Bridger, Inc., has set a minimum required return of 20%. What was the company€™s residual income last year?

Transcribed Image Text:

Bridger, Inc. Balance Sheet Beginning Ending Balance Balance Assets $ 125,000 $ 130,000 Cash .... Accounts receivable. 340,000 480,000 Inventory .. Plant and equipment, net Investment in Brier Company . Land (undeveloped) . 570,000 845,000 490,000 820,000 430,000 250,000 400,000 250,000 Total assets .... $2,530,000 $2,600,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt .. Stockholders' equity $ 380,000 $ 340,000 1,000,000 1,000,000 1,150,000 1,260,000 Total liabilities and stockholders' equity $2,530,000 $2,600,000 Bridger, Inc. Income Statement Sales.... $4,180,000 Operating expenses. 3,553,000 Net operating income. 627,000 Interest and taxes: Interest expense Тах еxpense $120,000 200,000 320,000 Net income. $ 307,000