Question
Westerville Company reported the following results from last years operations: Sales $ 1,300,000 Variable expenses 440,000 Contribution margin 860,000 Fixed expenses 600,000 Net operating income
Westerville Company reported the following results from last years operations: Sales $ 1,300,000 Variable expenses 440,000 Contribution margin 860,000 Fixed expenses 600,000 Net operating income $ 260,000 Average operating assets $ 812,500 This year the company has a $162,500 investment opportunity with the following cost and revenue characteristics: Sales $ 260,000 Contribution margin ratio 80 % of sales Fixed expenses $ 182,000 The companys minimum required rate of return is 15%. Required: 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.) Turnover
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