Problem 11-17 (Algo) Return on Investment (ROI) and Residual Income [LO11-1, LO11-2]

Financial data for Joel de Paris, Inc., for last year follow:

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	127,000		$	126,000
Accounts receivable		345,000			489,000
Inventory		579,000			479,000
Plant and equipment, net		809,000			806,000
Investment in Buisson, S.A.		394,000			428,000
Land (undeveloped)		245,000			251,000
Total assets	$	2,499,000		$	2,579,000
Liabilities and Stockholders' Equity
Accounts payable	$	370,000		$	336,000
Long-term debt		971,000			971,000
Stockholders' equity		1,158,000			1,272,000
Total liabilities and stockholders' equity	$	2,499,000		$	2,579,000

Joel de Paris, Inc. Income Statement
Sales					$	4,512,000
Operating expenses						3,790,080
Net operating income						721,920
Interest and taxes:
Interest expense	$	129,000
Tax expense		197,000				326,000
Net income					$	395,920

The company paid dividends of $281,920 last year. The Investment in Buisson, S.A., on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.

Required:

1. Compute the company's average operating assets for last year.

2. Compute the companys margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

3. What was the companys residual income last year?