Financial Data for Windsor, Inc The Company Paid Dividends of $104,000 Last Year

question 12

Essay

Financial data for Windsor, Inc. for last year appear below:
$$\begin{array} {c}\text {Windsor, Inc.}\\\text {Income Statement}\\\begin{array} { l r r } \text { Sales } & \$ 1,750,000 \\\text { Less operating expenses } & 1,470,000\\\text { Net operating income } & 280,000\\ \text { Less interest and taxes: } & & \\\text { Interest expense } & \$ 96,000 \\\text { Tax expense } & 70,000 & 166,000 \\\text { Net income } & &\$ 114,000 \\\end{array}\end{array}$$
The company paid dividends of $104,000 last year. The "Investment in Pine Company" on the statement of financial position represents an investment in the stock of another company.
Required:
a. Compute the company's margin, turnover, and return on investment for last year.
b. The Board of Directors of Windsor, Inc. has set a minimum required return of 25%. What was the company's residual income last year?

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Definitions:

Sales Presentation

A structured pitch or demonstration aimed at persuading potential buyers to purchase a product or service.

Preapproach Step

The stage in the sales process where the salesperson gathers relevant information about a potential customer before making the initial contact or sales pitch.

Key Decision Makers

Individuals or groups within an organization who have the authority to commit resources and make significant choices affecting the direction and outcomes of projects or business strategies.

Personal-selling Process

A series of steps followed by salespeople, including prospecting, approaching, presenting, handling objections, closing, and follow-up.