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

Sales$1,200,000

Variable expenses420,000

Contribution margin780,000

Fixed expenses600,000

Net operating income$180,000

Average operating assets$600,000

At the beginning of this year, the company has a $137,500 investment opportunity with the following cost and revenue characteristics:

Sales$220,000Contribution margin ratio60% of salesFixed expenses$99,000

The company's minimum required rate of return is 20%.

Required:

1.What is last year's margin?