Westerville Company reported the following results from last year’s operations: |
Sales | $ | 1,750,000 |
Variable expenses | 520,000 | |
Contribution margin | 1,230,000 | |
Fixed expenses | 880,000 | |
Net operating income | $ | 350,000 |
Average operating assets | $ | 875,000 |
This year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: |
Sales | $ | 320,000 | |
Contribution margin ratio | 60 | % of sales | |
Fixed expenses | $ | 128,000 | |
The company’s minimum required rate of return is 20%. |
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Westerville Company reported the following results from last year’s operations:What is last year’s margin? What is last year’s turnover? What is last year’s return on investment (ROI)? What is the margin related to this year’s investment opportunity? Wh
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