PROBLEM 11-17 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 Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets. Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Beginning Ending Balance Balance $ 140,000 $120,000 450,000 530,000 320,000 380,000 680,000 620,000 250,000 280,000 180,000 170,000 $2,020,000 $2,100,000 $360,000 $310,000 1,500,000 1,500,000 160,000 290,000 $2,020,000 $2,100,000 Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense Net income Joel de Paris, Inc. Income Statement $4,050,000 3,645,000 405,000 $150,000 110,000 260,000 $ 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%.