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please solve - highlight or underline answers Westerville Company reported the following results from last year's operations Sales Varlable expenses Contribution margin Fixed expenses Net
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Westerville Company reported the following results from last year's operations Sales Varlable expenses Contribution margin Fixed expenses Net operating Income $ 1,500,000 650,000 850,000 580,000 $ 270,000 Average operating assets $ 1,000,000 This year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics $ 240,000 Sales Contribution margin ratio Fixed expenses 70% of sales $144,000 The company's minimum required rate of return is 10% -a) What is last year's residual income? -b) What is the residual income of this year's investment opportunity? -c) l the company pursues the investment opportunity and otherwise performs the same as last ear, what residual income will it earn this vear? -d) If Westerville's chief executive officer will earn a bonus only if her residual income from this year xceeds her residual income from last year, would she pursue the investment opportunityStep by Step Solution
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