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Business, 06.05.2020 07:01 cuhh

Westerville Company reported the following results from last year’s 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

At the beginning of 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 company’s minimum required rate of return is 10%.

Required:

a. What is last year's margin?
b. What is last year's turnover?
c. What is last year's return on investment (ROI)?
d. What is the margin related to this year's investment opportunity?
e. What is the turnover related to this year's investment opportunity?

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Answers: 3

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Westerville Company reported the following results from last year’s operations:

Sales $...
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