The following 2013 information is available for Leffingwell Industries: average assets invested $ 8,200,000; sales, $ 31,400,000; and expenses, $ 27,600,000.
a. Calculate return on investment. (Round to one decimal point.)
b. Calculate profit margin. (Round to one decimal point.)
c. Calculate asset turnover. (Round to one decimal point.)
d. Using (b) and (c), prove your answer to (a). (Round to one decimal point.)
e. Assuming Leffingwell’s cost of capital is 14 percent, compute the 2013 residual income.