Required information [The following information applies to the questions displayed below.) 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 Contribution margin ratio Fixed expenses $580,000 70 % of sales $319,000 The company's minimum required rate of return is 10%. 12. What is the residual income of this year's investment opportunity? Residual income $ 29,000 Required information [The following information applies to the questions displayed below. 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 Contribution margin ratio Fixed expenses $590,000 70 % of sales $319,000 The company's minimum required rate of return is 10%. 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? Residual income $ 235,250