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Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: At the beginning of

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Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: The company's minimum required rate of return is 15%. 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: The company's minimum required rate of return is 15%. 14. If Westerville's chief executive officer will earn a bonus only if her residual income from this year exceeds her residual income from ast year, would she pursue the investment opportunity? Yes No Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: The company's minimum required rate of return is 15%. 15-a. Assume the contribution margin ratio of the investment opportunity was 75% instead of 80%. If Westerville's Chief Executive Officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she pursue the investment opportunity? Yes No 15-b. Would the owners of the company want her to pursue the investment opportunity? Yes No

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