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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: Sales Variable expenses Contribution

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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: Sales Variable expenses Contribution margin Fixed expenses Net operating Income Average operating ouets $1,400,000 $10,000 890,000 610.000 $ 280,000 $ 875,000 At the beginning of this year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 280,000 50 of sales $ 98,000 The company's minimum required rate of return is 15% 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., 0.1234 should be considered as 12.3%.)) ROI % hces 10-a. If Westerville's chief executive officer will earn a bonus only if her Rol from this year exceeds her ROI from last year, would she pursue the investment opportunity? Yes No 10.b. Would the owners of the company want her to pursue the investment opportunity? Yes O No 11. What is last year's residual income? Residual income 12. What is the residual income of this year's investment opportunity? Residual income 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 a 14. 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-a. Assume that the contribution margin ratio of the investment opportunity was 40% Instead of 50%. 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 ONO 15-6. Would the owners of the company want her to pursue the investment opportunity? Yes

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