Total Liabilities $10,7 BWT INC Income Statement dollar amouns are in thousends) Total owner's equity otal liabilities and owner equity Year 1 $96,52 $55 ost of gogd sold margin $67,56 $50,0 $38 Selling and administrative expenses ncome $7,36 e tax expense (30% rate) et income BWT, Inc. Balance Sheet Average Balance dollar amouns are in thousands The income statement indicates sales increased 30 percent from year 1 to year 2 and 35 percent from year 2 to year 3. Net income increased 14 percent from year 1 to year 2, and 18 percent from year 2 to year 3. One member on the committee, Buster, would like to offer the CEO a multiyear extension with a significant bump in salary and thousands of shares of stock options. When questioned why, Vivian pointed to the positive results reflected on the income statement. eaf Year 1 Average Balance Average Balance Average Balance Cash $6,7 $5,2 Another committee member, Carter, agrees look great, but she would like to review other measures of performance as well. Carter has asked you to come up with two measures of performance that go beyond simply looking at the income statement with Buster that income statement trends Accounts receivable 10,75 8,32 Total curent assets $35 $22, Property, plant, and equipment 38, Required: Land (held for sale) 1. Calculate return on investment for each of the three years. Note that balance sheet amounts presented for each year are already average balances (i.e, no need to calculate average balances). Assume land held for sale is not an operating asset. otal assets 2. Calculate residual income for each of the three years assuming the company's cost iabilities and owners equity of capital rate is 12 percent. Accounts payable Other current liabilities 3. Summarize and explain your findings in parts 1 and 2 to the committee Activate Wing Go to Settings to a Total currentiabilities $16,34 $7,3 Long-term liabilities