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Financial data for Beaker Company for last year appear below: Beaker Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $ 260,000 $

Financial data for Beaker Company for last year appear below:

Beaker Company
Statements of Financial Position
Beginning Balance Ending Balance
Assets:
Cash $ 260,000 $ 217,450
Accounts receivable 157,000 149,000
Inventory 288,000 284,000
Plant and equipment (net) 496,000 450,000
Investment in Cedar Company 233,000 347,000
Land (undeveloped) 335,000 335,000
Total assets $ 1,769,000 $ 1,782,450
Liabilities and owners' equity:
Accounts payable $ 213,000 $ 171,000
Long-term debt 803,000 803,000
Owners' equity 753,000 808,450
Total liabilities and owners' equity $ 1,769,000 $ 1,782,450

Beaker Company
Income Statement
Sales $ 2,500,000
Less operating expenses 1,925,000
Net operating income 575,000
Less interest and taxes:
Interest expense $ 96,300
Tax expense 224,250 320,550
Net income $ 254,450

The company paid dividends of $199,000 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company.

Required:

a. Compute the company's margin, turnover, and return on investment for last year.

b. The Board of Directors of Beaker Company has set a minimum required return of 45%. What was the company's residual income last year?

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