An expansion at XYZ Inc. would increase sales revenues by $120,000 per year and cash operating expenses by $45,000 per year. The initial investment would be for equipment that would cost $282,000 and have a 6-year life with no salvage value. The annual depreciation on the equipment would be $47,000. The simple rate of return on the investment is closest to (Ignore income taxes.):

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.