The company paid dividends of $152,360 last year. The “Investment in Buisson, S.
ID: 2462415 • Letter: T
Question
The company paid dividends of $152,360 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company.
Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your answers to 2 decimal places.)
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 20%. What was the company’s residual income last year?
Financial data for Joel de Paris, Inc., for last year follow:Explanation / Answer
1
Compute the company’s margin, turnover, and return on investment (ROI) for last year.
Operating assets do not include investment in other company or undevloped land
Average operating Assets = 1940000+1900000 /2
=1920000
Margin = Net opearating Income / Sales
= 591360 /4224000
=14%
Turn Over = Sales / Average operating Assets
= 4224000/1920000
=2.2
ROI = Margin * turnover
= 14 % *2.2
=30.8%
2
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 20%. What was the company’s residual income last year
Assets Ending ` Beginig Cash 127,000 135,000 Accounts receivable 481,000 338,000 Inventory 477,000 564,000 Plant and equipment, net 855,000 863,000 Total Operating Assets 1940000 1900000