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#10 a and b please help Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating
#10 a and b please help
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $1,500,000 690,000 810,000 435,000 $ 375,000 $ 1,250,000 At the beginning of this year, the company has a $350,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 420,000 70% of sales $ 252,000 The company's minimum required rate of return is 10%. 10-a. If Westerville's chief executive officer will earn a bonus only if her ROI from this year exceeds her ROI from last year, would she pursue the investment opportunity? Yes No 10-b. Would the owners of the company want her to pursue the investment opportunity? Yes No Step by Step Solution
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