ROI and Residual Income; Annual Reports; Use of Internet (LO 2)Select one of the following...

ROI and Residual Income; Annual Reports; Use of Internet (LO 2)

Select one of the following companies (or any company of your choosing) and use the Internet to explore the company’s most recent annual report.

American Airlines   www.americanair.com

Deere and Company   www.deere.com

Firestone   www.tirestone.com

IBM   www.ibm.com

Pizza Hut   www.pizzahut.com

Wyndham Hut   www.wyndham.com

Walmart   www.wal-mart.com

Required:

1. Calculate the company’s overall return on investment (ROI). Also, calculate the company’s overall residual income. (Assume an imputed interest rate of 10 percent.) List and explain any assumptions you make.

2. Does the company include a calculation of ROI in its online annual report? If it does, do your calculations agree with those of the company? If not, what would be some possible explanations?