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

Financial data for Joel de Paris, Incorporated, for last year follow:

Joel de Paris, Incorporated Balance Sheet
	Beginning Balance	Ending Balance
Assets
Cash	$ 136,000	$ 139,000
Accounts receivable	330,000	486,000
Inventory	562,000	479,000
Plant and equipment, net	872,000	836,000
Investment in Buisson, S.A.	394,000	430,000
Land (undeveloped)	251,000	247,000
Total assets	$ 2,545,000	$ 2,617,000
Liabilities and Stockholders' Equity
Accounts payable	$ 388,000	$ 345,000
Long-term debt	963,000	963,000
Stockholders' equity	1,194,000	1,309,000
Total liabilities and stockholders' equity	$ 2,545,000	$ 2,617,000

Joel de Paris, Incorporated Income Statement
Sales		$ 5,184,000
Operating expenses		4,561,920
Net operating income		622,080
Interest and taxes:
Interest expense	$ 118,000
Tax expense	204,000	322,000
Net income		$ 300,080

The company paid dividends of $185,080 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?

% 1. Average operating assets 2. Margin 2. Turnover 2. ROI % 3. Residual income