Ch. 9: Problem Solving 1: Return on Investment (ROI) and Residual Income L09-1, L09-21 Ending Balance Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Assets Cash $ 140,000 Accounts receivable 450,000 Inventory 320,000 Plant and equipment, net. 680,000 Investment in Buisson, S.A. 250,000 Land (undeveloped) 180,000 Total assets $2,020,000 Liabilities and Stockholders' Equity Accounts payable $360,000 Long-term debt 1,500,000 Stockholders' equity 160,000 Total liabilities and stockholders' equity $2,020,000 $ 120,000 530,000 380,000 620,000 280,000 170,000 $2,100,000 $ 310,000 1,500,000 290,000 $2,100,000 Joel de Paris, Inc. Income Statement $4,050,000 3,645,000 405,000 Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income $150,000 110,000 260,000 $ 145,000 The company paid dividends of $15,000 last year. The "Investment in Buisson, S.A." 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 Joel de Paris, Inc., has set a minimum required rate of retum of 15%. What was the company's residual income last year