Financial Data for Beaker Company for Last Year Appear Below $\quad$

question 22

Essay

Financial data for Beaker Company for last year appear below:

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Beaker Company
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Income Statement
$\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 414,000 \\\hline \text { Less operating expenses } & & 351,900 \\\hline \text { Net operating income } & & 62,100 \\\hline \text { Less interest and taxes: } & & \\\hline \text { Interest expense } & \$ 30,000 & \\\hline \text { Tax expense } & 10,000 & 40,000 \\\hline \text { Net income } & & \$ 22,100 \\\hline\end{array}$ The company paid dividends of $2,100 last year.The "Investment in Cedar 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 Beaker Company has set a minimum required return of 20%.What was the company's residual income last year?

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