PLEASE SHOW WORK
Q:
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Financial data for Bridger, Inc., for last year are as follows: |
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Bridger, Inc. |
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Beginning |
Ending |
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Assets |
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Cash |
$ |
125,000 |
$ |
130,000 |
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Accounts receivable |
340,000 |
480,000 |
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Inventory |
570,000 |
490,000 |
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Plant and equipment, net |
845,000 |
820,000 |
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Investment in Brier Company |
400,000 |
430,000 |
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Land (undeveloped) |
250,000 |
250,000 |
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Total assets |
$ |
2,530,000 |
$ |
2,600,000 |
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Liabilities and Stockholders’ Equity |
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Accounts payable |
$ |
380,000 |
$ |
340,000 |
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Long term debt |
1,000,000 |
1,000,000 |
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Stockholders’ equity |
1,150,000 |
1,260,000 |
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Total liabilities and stockholders’ equity |
$ |
2,530,000 |
$ |
2,600,000 |
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Bridger, Inc. |
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Sales |
$ |
4,180,000 |
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Operating expenses |
3,553,000 |
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Net operating income |
627,000 |
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Interest and taxes: |
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Interest expense |
$ 120,000 |
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Tax expense |
200,000 |
320,000 |
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Net income |
$ |
307,000 |
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The company paid dividends of $197,000 last year. The “Investment in Brier Company” on the balance sheet represents an investment in the stock of another company. |
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Required: |
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1. |
Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round the “Turnover” to 2 decimal places. Omit the “%” sign in your response.) |
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2. |
The board of directors of Bridger, Inc., has set a minimum required return of 20%. What was the company’s residual income last year? (Omit the “$” sign in your response.) |