[The following information applies to the questions displayed below.] Westerville Company reported the following results from...

 

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[The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $1,400,000 510,000 Sales Variable expenses Contribution margin 890,000 610,000 Fixed expenses Net operating income $ 280,000 Average operating assets $ 875,000 This year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $280,000 Contribution margin ratio Fixed expenses 50 % of sales $ 98,000 The company's minimum required rate of return is 15%. Required: 1. What is last year's margin? 2. What is last year's turnover? (Round your answer to 1 decimal place.) 3. What is last year's return on investment (RO1)? 4. What is the margin related to this year's investment opportunity? 5. What is turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.) 6. What is the ROI related to this year's investment opportunity? 7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (ie .1234 should be entered as 12.3)) [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $1,400,000 510,000 Sales Variable expenses Contribution margin 890,000 610,000 Fixed expenses Net operating income $ 280,000 Average operating assets $ 875,000 This year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $280,000 Contribution margin ratio Fixed expenses 50 % of sales $ 98,000 The company's minimum required rate of return is 15%. Required: 1. What is last year's margin? 2. What is last year's turnover? (Round your answer to 1 decimal place.) 3. What is last year's return on investment (RO1)? 4. What is the margin related to this year's investment opportunity? 5. What is turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.) 6. What is the ROI related to this year's investment opportunity? 7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (ie .1234 should be entered as 12.3))

Answer rating: 100% (QA)

Formula sheet A B C D E F G H I 2 3 Report from Last Year Operations 4 5 Sales 1400000 6 Variable Ex... View the full answer