Westerville Company reported the following results from last years operations:

Sales	$	1,500,000
Variable expenses		730,000
Contribution margin		770,000
Fixed expenses		470,000
Net operating income	$	300,000
Average operating assets	$	937,500

This year, the company has a $362,500 investment opportunity with the following cost and revenue characteristics:

Sales	$	580,000
Contribution margin ratio		70	% of sales
Fixed expenses	$	319,000

The companys minimum required rate of return is 10%.

1.

What is last years margin?

2.

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

8.

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

9.

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

11.

What is last years residual income?

12.

What is the residual income of this years investment opportunity?

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