Return on Investment (ROI) and Residual Income [LO9-1, LO9-2] Financial data for Joel de Paris, Inc.,...

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Return on Investment (ROI) and Residual Income [LO9-1, LO9-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable. Inventory $ 140,000 $ 120,000 450,000 530,000 320,000 380,000 Plant and equipment, net. Investment in Buisson, S.A. Land (undeveloped). 680,000 620,000 250,000 280,000 180,000 170,000 Total assets .... $2,020,000 $2,100,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity $ 360,000 1,500,000 160,000 $2,020,000 $ 310,000 1,500,000 290,000 $2,100,000 Joel de Paris, Inc. Income Statement Sales.... Operating expenses $4,050,000 3,645,000 405,000 Net operating income Interest and taxes: Interest expense Tax expense Net income $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. Required: 1. Compute the company's margin, turnover, and return on investment (ROI) for last year. 2. The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 15%. What was the company's residual income last year?

Answer rating: 100% (QA)

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