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Be sure to show your steps and explain why! Or I will rate it as incomplete. Westerville Company reported the following results from last year's
Be sure to show your steps and explain why! Or I will rate it as incomplete.
Westerville Company reported the following results from last year's operations Sales Variable expenses Contribution margin Fixed expenses Net operating income $1,500,000 690,000 810,000 435,000 $375,000 Average operating assets $ 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%. 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 O N 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? Chief Executive fficerwi O Yes O No 15-b. Would the owners of the company want her to pursue the investment opportunity? Yes O NoStep by Step Solution
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