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Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income. $1,400,000 220,000 680,000 470,000
Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income. $1,400,000 220,000 680,000 470,000 $ 210,000 Average operating assets $875,000 At the beginning of this year, the company has a $350,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $560,000 70 of sales $ 336,000 The company's minimum required rate of return is 15%. Foundational 10-11 (Algo) 11. What is last year's residual income? Residual income 12. What is the residual income of this year's investment opportunity? Residual Income 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? Residual income
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