Westerville Company reported the following results from last years operations:

Sales	$	1,900,000
Variable expenses		550,000
Contribution margin		1,350,000
Fixed expenses		875,000
Net operating income	$	475,000
Average operating assets	$	1,187,500

This year, the company has a $237,500 investment opportunity with the following cost and revenue characteristics:

Sales	$	380,000
Contribution margin ratio		50	% of sales
Fixed expenses	$	133,000

The companys minimum required rate of return is 10%.

1-

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 .1234 should be entered as 12.3))( THE ANSWER IS NOT 37% or 40%)

2 What is last years residual income?

3-What is the residual income of this years investment opportunity?

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