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Show work really confused CHAPTER 11: CHAPTER END REVIEW Best Sleep Company reported the following results from last year's operations: $ Sales Variable expenses Contribution

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CHAPTER 11: CHAPTER END REVIEW Best Sleep Company reported the following results from last year's operations: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets 1,500,000 650,000 850,000 580,000 270,000 1,000,000 $ $ At the beginning of this year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics Sales Contribution margin ratio $ 240,000 70 % of sales $ 144,000 Fixed expenses 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? 14. IF BEST SLEEP'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? 15. ASSUME THAT THE CONTRIBUTION MARGIN RATIO OF THE INVESTMENT OPPORTUNITY WAS 65% INSTEAD OF 70%. IF BEST SLEEP'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? WOULD THE OWNERS OF THE COMPANY WANT HER TO PURSUE THE INVESTMENT OPPORTUNITY

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