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Compute what roi related to the year investment opportunity

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Reference no: EM132638730

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

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%.

Required:

Question 1. What is last year's margin?

Question 2. What is last year's turnover? (Round your answer to 1 decimal place.)

Question 3. What is last year's return on investment (ROI)?

Question 4. What is the margin related to this year's investment opportunity?

Question 5. What is the turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.)

Question 6. What is the ROI related to this year's investment opportunity?

Question 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 (i.e .1234 should be entered as 12.3))

Reference no: EM132638730

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