Less interest and taxes: The company paid dividends of $200,000 last year. The \

Question

  Less interest and taxes:

The company paid dividends of $200,000 last year. The "Investment in Pine Company" on the statement of financial position represents an investment in the stock of another company.

Compute the company's margin, turnover, and return on investment for last year. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "%" sign in your response.)

The Board of Directors of Windsor, Inc. has set a minimum required return of 25%. What was the company's residual income last year? (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Windsor Inc Details Beginning Balance $ Ending Balance$ Net Opearting Working Capital Cash                 346,000                324,792 Plus Inventory                 298,000                299,000 Plus Accounts Receivable                 202,000                159,000 Less Accounts Payable                 249,000                228,000 NOWC                 597,000                554,792 Plus Net Plant & Equipment                 463,000                455,000 Net Investment in Opearting Capital              1,060,000            1,009,792 Average of Invested capital $         1,034,896 Sales                1,790,000 Net Income                 124,792 Average Invested Capital              1,034,896 Margin = Net income/sales 6.97% Turnover =Sales/Avg Invested capital                        1.73 ROI = Margin*Turnover 12.06% Required return @25% on invested capital =                 258,724 Residual Income= $           (133,932) Investemt is other company and non developed land considered as non -operating capital

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