# Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Financial data for Joel de...

###### Question:

Problem 10-15 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2]

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 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%.

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. (Round "Turnover" to 1 decimal place.)

3. What was the company’s residual income last year?

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