Required information The Foundational 15 (LO10-1, LO10-2] [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 assets $ 1,000,000 300,000 700,000 500,000 $ 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60% of sales $ 90,000 The company's minimum required rate of return is 15%. Foundational 10-7 7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Margin : % The Foundational 15 (LO10-1, LO10-2] (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 assets $ 1,000,000 300,000 700,000 500,000 $ 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 % of sales $ 90,000 The company's minimum required rate of return is 15%. oundational 10-10 -a. If Westerville's chief executive officer will earn a bonus only if her ROI from this year exceeds her ROI from last year, would she ursue the investment opportunity? O Yes O No -b. Would the owners of the company want her to pursue the investment opportunity? Yes O No Required information The Foundational 15 [LO10-1, LO10-2] [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 assets $ 1,000,000 300,000 700,000 500,000 $ 200,000 $ 625,000 At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 60 % of sales $ 90,000 The company's minimum required rate of return is 15%. Foundational 10-14 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 Foundational 10-15 15-a. Assume that the contribution margin ratio of the investment opportunity was 50% instead of 60%. 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 15-b. Would the owners of the company want her to pursue the investment opportunity? Yes O No
