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Westerville Company reported the following results from last years operations: Sales $ 1,400,000 Variable expenses 510,000 Contribution margin 890,000 Fixed expenses 610,000 Net operating income

Westerville Company reported the following results from last years operations:

Sales $ 1,400,000
Variable expenses 510,000
Contribution margin 890,000
Fixed expenses 610,000
Net operating income $ 280,000
Average operating assets $ 875,000

At the beginning of this year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics:

Sales $ 280,000
Contribution margin ratio 50 % of sales
Fixed expenses $ 98,000

The companys minimum required rate of return is 15%.

2. What is last years turnover? (Round your answer to 1 decimal place.)

5. What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal place.)

6. What is the ROI related to this years investment opportunity?

7. 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 .1234 should be entered as 12.3))

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