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[The following information applies to the questions displayed below.] Westerville Company reported the following results from last years operations: Sales $ 1,000,000 Variable expenses 300,000

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

Westerville Company reported the following results from last years operations:

Sales $ 1,000,000
Variable expenses 300,000
Contribution margin 700,000
Fixed expenses 500,000
Net operating income $ 200,000
Average operating assets $ 625,000

At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics:

Sales $ 200,000
Contribution margin ratio 60 % of sales
Fixed expenses $ 90,000

The companys minimum required rate of return is 15%.

Required:

1. What is last years margin?

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