1. Selected sales and operating data for three divisions of different structural engineering firms are given below:

REQUIRED:

1. Compute each division’s margin, turnover, and return on investment (ROI).
2. Compute each division’s residual income (loss).
3. Assume each division is presented with an investment opportunity yielding a 8% rate of return.
   1. If performance is being measured by ROI, which division or divisions will accept the opportunity?
   2. If performance is being measured by residual income, which division or divisions will accept the opportunity?
   
   
   2. Financial data for Joel de Paris, Incorporated, for last year follow:Joel de Paris, Incorporated Balance SheetBeginning BalanceEnding BalanceAssetsCash$ 135,000$ 138,000Accounts receivable331,000490,000Inventory567,000490,000Plant and equipment, net847,000802,000Investment in Buisson, S.A.404,000431,000Land (undeveloped)247,000250,000Total assets$ 2,531,000$ 2,601,000Liabilities and Stockholders’ EquityAccounts payable$ 376,000$ 331,000Long-term debt978,000978,000Stockholders’ equity1,177,0001,292,000Total liabilities and stockholders’ equity$ 2,531,000$ 2,601,000Joel de Paris, Incorporated
   Income StatementSales$ 5,130,000Operating expenses4,514,400Net operating income615,600Interest and taxes:Interest expense$ 123,000Tax expense200,000323,000Net income$ 292,600The company paid dividends of $177,600 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 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.Note: Round “Margin”, “Turnover” and “ROI” to 2 decimal places.
   3. What was the company’s residual income last year?