Beaker Company Statements of Financial Position Assets Beginning Balance Ending Balance Cash 50,000 70,000 Accounts Receivable 20,000 25,000 Inventory 30,000 35,000 Plant and equipment (net) 120,000 110,000 Investment in Cedar Company 80,000 100,000 Land (undeveloped) 170,000 170,000 Total Assets 470,000 510,000 Liabilities and Owners' equity: Accounts payable 70,000 90,000 Long-term debt 250,000 250,000 Owners' equity 150,000 170,000 Total liabilities and owners equity 470,000 510,000 Beaker Company Income Statement Sales 414,000 Less Operating expenses 351,900 New Operating Income 62,100 Less Interest and taxes: Interest expense 30,000 Tax Expense 10,000 40,000 Net Income $22,100
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:
i. Compute the company's margin, turnover, and return on investment for last year.
ii. The Board of Directors of Beaker Company has set a minimum required return of 20%. What was the company's residual income last year?