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Please I need assistance answering the attached 4 questions highlighted in red. Thanks for the help. Westerville Company reported the following results from last year's
Please I need assistance answering the attached 4 questions highlighted in red. Thanks for the help.
Westerville Company reported the following results from last year's operations: Sales Variable expenses $ 1,500,000 730,000 Contribution margin Fixed expenses 770,000 470,000 Net operating income $ 300,000 Average operating assets $ 937,500 This year, the company has a $362,500 investment opportunity with the following cost and revenue characteristics: Sales $580,000 Contribution margin ratio 70 % of sales Fixed expenses $319,000 The company's minimum required rate of return is 10%. 1.) If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? 2.) If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? 3.) What is the residual income of this year's investment opportunity? 4.) If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this yearStep by Step Solution
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