Question
Please provide complete answer for ALL questions. Westerville Company reported the following results from last years operations: Sales $ 1,900,000 Variable expenses 550,000 Contribution margin
Please provide complete answer for ALL questions.
Westerville Company reported the following results from last years operations: |
Sales | $ | 1,900,000 |
Variable expenses | 550,000 | |
Contribution margin | 1,350,000 | |
Fixed expenses | 875,000 | |
Net operating income | $ | 475,000 |
Average operating assets | $ | 1,187,500 |
This year, the company has a $237,500 investment opportunity with the following cost and revenue characteristics: |
Sales | $ | 380,000 | |
Contribution margin ratio | 50 | % of sales | |
Fixed expenses | $ | 133,000 | |
The companys minimum required rate of return is 10%. |
Required: |
2. | What is last years turnover? (Round your answer to 1 decimal place.) |
3. | What is last years return on investment (ROI)? |
7. | If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e .1234 should be entered as 12.3)) |
8. | If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.) |
9. | If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Round your percentage answer to 1 decimal place (i.e .1234 should be entered as 12.3)) |
11. | What is last years residual income?
|
12. | What is the residual income of this years investment opportunity? |
13. | If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? |
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