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What is the margin related to year investment opportunity

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Reference no: EM132507579

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

Sales$1,800,000

Variable expenses 740,000

Contribution margin 1,060,000

Fixed expenses 700,000

Net operating income$360,000

Average operating assets$1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:

Sales $600,000

Contribution margin ratio 60% of sales

Fixed expenses $288,000

  • The company's minimum required rate of return is 10%.

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

Reference no: EM132507579

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