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Midwest Ice Fishing Midwest Ice Fishing Excursions is considering an investment of $700,000 to enhance their excursion offerings. The following table details the characteristics of
Midwest Ice Fishing Midwest Ice Fishing Excursions is considering an investment of $700,000 to enhance their excursion offerings. The following table details the characteristics of the potential investment: Sales increase $2,240,000 Contribution margin 40% of increased sales Fixed expenses $739,200 3.) What is the margin of the potential investment for Midwest Ice Fishing Excursions? (Answer: 7%) Best Italian Eats The Pizza division of Best Italian Eats had average operating assets of $800,000 and net operating income of $81,300 in 2020. The minimum required rate of return for evaluation purposes is 10% 4.) What was the residual income in 2020 for the Pizza division? (Answer: 1,300)
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