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Help calculating company's turnover Westerville Company reported the following results from last years operations: Sales $ 1,750,000 Variable expenses 520,000 Contribution margin 1,230,000 Fixed expenses
Help calculating company's turnover
Westerville Company reported the following results from last years operations:
Sales | $ | 1,750,000 |
Variable expenses | 520,000 | |
Contribution margin | 1,230,000 | |
Fixed expenses | 880,000 | |
Net operating income | $ | 350,000 |
Average operating assets | $ | 875,000 |
At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics:
Sales | $ | 320,000 | |
Contribution margin ratio | 60 | % of sales | |
Fixed expenses | $ | 128,000 | |
The companys minimum required rate of return is 20%.
8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year?
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