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Westerville Company reported the following results from last years operations: Sales $ 1,500,000 Variable expenses 530,000 Contribution margin 970,000 Fixed expenses 670,000 Net operating income

Westerville Company reported the following results from last years operations:

Sales $ 1,500,000
Variable expenses 530,000
Contribution margin 970,000
Fixed expenses 670,000
Net operating income $ 300,000
Average operating assets $ 937,500

At the beginning of this year, the company has a $212,500 investment opportunity with the following cost and revenue characteristics:

Sales $ 340,000
Contribution margin ratio 70 % of sales
Fixed expenses $ 187,000

The companys minimum required rate of return is 10%.

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

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