15 Required Information (The following Information applies to the questions displayed below) Westerville Company reported the following results from last year's operations: Sales $1,500, eee Variable expenses 650, ege Contribution margin 850, ege Fixed expenses 588 eee Net operating income $ 270, eee Average operating assets $1,000,000 At the beginning of this year, the company has a $160,000 Investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $248,888 70% of sales $ 144,000 The company's minimum required rate of return is 10% 13. If the company pursues the Investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? Residual income Required information (The following information applies to the questions displayed below.) 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 eve Net operating income $ 270,000 Average operating assets $1,688,888 At the beginning of this year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics: Sales $ 240,00 Contribution margin ratio 70 of sales Fixed expenses $144,000 The company's minimum required rate of return is 10% 14. If Westerville's chief executive officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she pursue the investment opportunity? Yes NO Required information The following information applies to the questions displayed below.) Westerville Company reported the following results from last year's operations: Sales $1,500,000 Variable expenses 650 000 Contribution margin 850,eee Fixed expenses 580.ee Net operating income 270,000 Average operating assets $1,080,eee $ At the beginning of this year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses 240, eee 70 % of sales $ 144,888 The company's minimum required rate of return is 10% 15-a. Assume that the contribution margin ratio of the investment opportunity was 65% instead of 70%. If Westerville's Chief Executive Officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she pursue the Investment opportunity? Yes No 15-b. Would the owners of the company want her to pursue the investment opportunity? Yes No