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    Residual income and ROI

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    Financial data for Joal de Paris Inc for last year is as follows (see attachment)
    The company paid dividends of $15,000 last year. The "Investment in Buisson, SA on the balance sheet represents an investment in stock of another company.
    1. Compute the company's margin, turnover, and ROI for last year.
    2. The board of directors of Joel de paris has a set minimum required rate of return of 15%. What was the company's residual income last year?

    © BrainMass Inc. brainmass.com June 4, 2020, 12:36 am ad1c9bdddf
    https://brainmass.com/business/accounting/residual-income-and-roi-348667

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    1. Margin = Net Operating Income/Sales = 405,000/4,050,000 = 10%
    Turnover = Sales/Average Operating Assets
    Average Operating Assets = ...

    Solution Summary

    The solution explains the calculation of residual income and ROI

    $2.19

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