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Westerville Company reported the following results from last years operations: Sales $ 1,600,000 Variable expenses 700,000 Contribution margin 900,000 Fixed expenses 660,000 Net operating income
Westerville Company reported the following results from last years operations: |
Sales | $ | 1,600,000 |
Variable expenses | 700,000 | |
Contribution margin | 900,000 | |
Fixed expenses | 660,000 | |
Net operating income | $ | 240,000 |
Average operating assets | $ | 1,000,000 |
This year, the company has a $325,000 investment opportunity with the following cost and revenue characteristics: |
Sales | $ | 520,000 | |
Contribution margin ratio | 70 | % of sales | |
Fixed expenses | $ | 312,000 | |
The companys minimum required rate of return is 15%. Required:
2- What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal place.) |
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