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Find what is the roi related to year investment opportunity

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Reference no: EM132587139

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

Sales $1,500,000

Variable expenses 650,000

Contribution margin 850,000

Fixed expenses 580,000

Net operating income$ 270,000

Average operating assets$1,000,000

This year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics:

Sales $240,000

Contribution margin ratio 70 % of sales

  • Fixed expenses $144,000 The company's minimum required rate of return is 10%.

Question 1: What is the ROI related to this year's investment opportunity?

Reference no: EM132587139

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