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10 Foundational 12-10 (LO2 - CC4, 5, 6, 7) 10 points Westerville Company reported the following results from last year's operations: eBook Sales Variable expenses
10 Foundational 12-10 (LO2 - CC4, 5, 6, 7) 10 points Westerville Company reported the following results from last year's operations: eBook Sales Variable expenses Contribution margin Fixed expenses Net operating income $1,000,000 300,000 700,000 500,000 $ 200,000 Average operating assets $ 625,000 References This year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales $ 200,000 Contribution margin ratio Fixed expenses 60% of sales $ 90,000 The company's minimum required rate of return is 15%. Required: 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 Would the owners of the company want her to pursue the investment opportunity? Yes No
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