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Required information Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last years operations: Sales

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[The following information applies to the questions displayed below.]

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%.

If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year?

If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year?

If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year?

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