Response to the following problem:
The following 2010 information is available for Cornwall Industries: average assets invested $7,200,000; revenues, $26,400,000; and expenses, $24,600,000.
a. Calculate return on investment.
b. Calculate profit margin.
c. Calculate asset turnover.
d. Using (b) and (c), prove your answer to (a).
e. Assuming Cornwall's cost of capital is 14 percent, compute the 2010 residual income.