Financial data for Windsor, Inc. for last year appear below:
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?
What will be an ideal response?
a. Operating assets do not include investments in other companies or in undeveloped land.
Average operating assets = ($1,020,000 + $980,000) ÷ 2 = $1,000,000.
Margin = Net operating income ÷ Sales = $280,000 ÷ $1,750,000 = 16%.
Turnover = Sales ÷ Average operating assets = $1,750,000 ÷ $1,000,000 = 1.75.
ROI = Margin × Turnover = 16% × 1.75 = 28%.
b. Residual income = Net operating income (Average operating assets × Minimum required rate of return) = $280,000 - ($1,000,000 × 25%) = $280,000 - $250,000 = $30,000.
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Answer the following statements true (T) or false (F)
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Which of the following is an essential element in establishing an ethical leadership?
A. The personality traits of the team members B. The ethical nature of the team members C. The end or objective toward which the leader leads D. The prevailing culture in the external environment
How can positioning statements aid in focusing a project team throughout the realization process?
What will be an ideal response?