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Financial data for Bridger Inc. for last year are as follows: BRIDGER INC. Balance Sheet Ending Balance Beginning Balance Assets Cash $ 165,000 $ 160,000
Financial data for Bridger Inc. for last year are as follows:
BRIDGER INC. Balance Sheet | ||||||
Ending Balance | Beginning Balance | |||||
Assets | ||||||
Cash | $ | 165,000 | $ | 160,000 | ||
Accounts receivable | 390,000 | 250,000 | ||||
Inventory | 400,000 | 420,000 | ||||
Plant and equipment, net | 805,000 | 850,000 | ||||
Investment in Brier Company | 600,000 | 570,000 | ||||
Land (undeveloped) | 420,000 | 420,000 | ||||
Total assets | $ | 2,780,000 | $ | 2,670,000 | ||
Liabilities and Shareholders’ Equity | ||||||
Accounts payable | $ | 490,000 | $ | 530,000 | ||
Long-term debt | 1,000,000 | 1,000,000 | ||||
Shareholders’ equity | 1,290,000 | 1,140,000 | ||||
Total liabilities and shareholders’ equity | $ | 2,780,000 | $ | 2,670,000 | ||
BRIDGER INC. Income Statement | ||||||
Sales | $ | 4,300,000 | ||||
Operating expenses | 3,784,000 | |||||
Operating income | 516,000 | |||||
Interest and taxes: | ||||||
Interest expense | $ | 104,000 | ||||
Tax expense | 170,000 | 274,000 | ||||
Net income | $ | 242,000 | ||||
The company paid dividends of $140,000 last year. The “Investment in Brier Company” on the balance sheet represents an investment in the common shares of another company.
Required:
1. Compute the company’s margin, turnover, and ROI for last year. (Round your intermediate calculations and final answers to 1 decimal place.)
2. The board of directors of Bridger Inc. has set a minimum required return of 17%. What was the company’s residual income last year?
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