Required information The Foundational 15 (Static) [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 $1,000,000 300,000 700,000 500,000 $ 200,000 $625,000 Average operating assets 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 10-12 (Static) 12. What is the residual income of this year's investment opportunity? Residual income $ 118,250