Westerville Company reported the following results from last year's operations:

Sales$1,300,000Variable expenses440,000Contribution margin860,000Fixed expenses600,000Net operating income$260,000Average operating assets$812,500

At the beginning of this year, the company has a $162,500 investment opportunity with the following cost and revenue characteristics:

Sales$260,000Contribution margin ratio80% of salesFixed expenses$182,000

The company's minimum required rate of return is 15%.

Required:

1.What is last year's margin?