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Westerville Company reported the following results from last year s operations: Sales $ 1 , 4 0 0 , 0 0 0 Variable expenses 5

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%.
1. What is last years margin %?
2. What is last years turnover? (Round your answer to 1 decimal place.)
3. What is last years return on investment (ROI)(Round your intermediate calculations to 1 decimal place.) in %?
4. What is the margin related to this years investment opportunity? written in %
5. What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal place.)
6.What is the ROI related to this years investment opportunity? (Do not round intermediate calculations.) written in percentage
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).)
8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)
9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e.,0.1234 should be entered as 12.3).)
10. N/A
11. What is last years residual income?
12. What is the residual income of this years investment opportunity?
13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?

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