PROBLEM 1117 Return on Investment (ROI) and Residual Income @ L0111, 10112 Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 140,000 $ 120,000 Accounts receivable 450,000 530,000 Inventory 320,000 380,000 Plant and equipment, net 680,000 620,000 Investment in Buisson, S.A. 250,000 280.000 Land (undeveloped) 180,000 170,000 Total assets $2,020,000 $2,100,000 Liabilities and Stockholders' Equity Accounts payable $360,000 $ 310,000 Long-term debt 1,500,000 1,500,000 Stockholders' equity 160,000 290,000 Total liabilities and stockholders' equity $2,020,000 $2,100,000 Joel de Paris, Inc. Income Statement Liabilities and Stockholders' Equity Accounts payable $ 360,000 $ 310,000 Long-term debt 1.500.000 1,500,000 Stockholders' equity 160,000 290,000 Total liabilities and stockholders' equity $2,020,000 $2,100,000 Joel de Paris, Inc. Income Statement Sales $4,050,000 Operating expenses 3,645,000 Net operating income 405,000 Interest and taxes: Interest expense $150,000 Tax expense 110,000 260.000 Net income $ 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. The company's minimum required rate of return of 15%. Page 529 Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Hint: Should you use net income or net operating income in your calculations?) 3. What was the company's residual income last year