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[The following information applies to the questions displayed below.] Westerville Company reported the following results from last years operations: Sales $ 1,400,000 Variable expenses 510,000

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last years operations:

Sales $ 1,400,000
Variable expenses 510,000
Contribution margin 890,000
Fixed expenses 610,000
Net operating income $ 280,000
Average operating assets $ 875,000

At the beginning of this year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics:

Sales $ 280,000
Contribution margin ratio 50 % of sales
Fixed expenses $ 98,000

The companys minimum required rate of return is 15%.

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).)

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