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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.)

2. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)

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