The Foundational $15($Algo$)[$LO$10-1,$ LO$10-2]$

Skip to question

$[$The following information applies to the questions displayed below.$]$

Westerville Company reported the following results from last year$$s operations:

Sales $ $1,400,000$

Variable expenses $680,000$

Contribution margin $720,000$

Fixed expenses $440,000$

Net operating income $ $280,000$

Average operating assets $ $875,000$

At the beginning of this year, the company has a $$300,000$ investment opportunity with the following cost and revenue characteristics:

Sales $ $480,000$

Contribution margin ratio $80\%$ of sales

Fixed expenses $ $336,000$

The company$$s minimum required rate of return is $15\%.$

Foundational $10-1($Algo$)$

Required:

$1.$ What is last year$$s margin?