Reference no: EM132602812

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

Sales                             $1,200,000

Variable expenses                420,000

Contribution margin           780,000

Fixed expenses               600,000

Net operating income          $180,000

Average operating assets      $600,000

At the beginning of this year, the company has a $137,500 investment opportunity with the following cost and revenue characteristics:

Sales      $220,000

Contribution margin ratio 60% of sales

Fixed expenses $99,000

The company's minimum required rate of return is 20%.

Question A). 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., 0.1234 should be entered as 12.3).)

Question B). If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)

Question C). If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3).)