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Westerville Company reported the following results from last years operations: Sales $ 2,000,000 Variable expenses 640,000 Contribution margin 1,360,000 Fixed expenses 860,000 Net operating income
Westerville Company reported the following results from last years operations:
Sales | $ | 2,000,000 |
Variable expenses | 640,000 | |
Contribution margin | 1,360,000 | |
Fixed expenses | 860,000 | |
Net operating income | $ | 500,000 |
Average operating assets | $ | 1,250,000 |
This year, the company has a $250,000 investment opportunity with the following cost and revenue characteristics: |
Sales | $ | 400,000 | |
Contribution margin ratio | 70 | % of sales | |
Fixed expenses | $ | 220,000 | |
The companys minimum required rate of return is 10%. 1. What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal place.)
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