Westerville Company reported the following results from last years operations:

Sales	$ 1,900,000
Variable expenses	550,000
Contribution margin	1,350,000
Fixed expenses	875,000
Net operating income	$ 475,000
Average operating assets	$ 1,187,500

At the beginning of this year, the company has a $237,500 investment opportunity with the following cost and revenue characteristics:

Sales	$ 380,000
Contribution margin ratio	50	% of sales
Fixed expenses	$ 133,000

The companys minimum required rate of return is 10%.

1. What is last years margin?

2. What is the margin related to this years investment opportunity?

3. What is the ROI related to this years investment opportunity? (Do not round intermediate calculations.)

4. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

5. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

6. What is the residual income of this years investment opportunity?

7. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?