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1.

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%.

Required:

What is last years return on investment (ROI)? (Do not round your interim calculations. Round your final answer to 1 decimal place.)

2.

Westerville Company reported the following results from last years operations:

Sales	$	2,200,000
Variable expenses		660,000
Contribution margin		1,540,000
Fixed expenses		1,100,000
Net operating income	$	440,000
Average operating assets	$	1,375,000

This year the company has a $275,000 investment opportunity with the following cost and revenue characteristics:

Sales	$	440,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	220,000

The companys minimum required rate of return is 15%.

Required:

What is the margin related to this years investment opportunity? 3. Westerville Company reported the following results from last years operations: Sales $ 1,600,000 Variable expenses 700,000 Contribution margin 900,000 Fixed expenses 660,000 Net operating income $ 240,000 Average operating assets $ 1,000,000 This year the company has a $325,000 investment opportunity with the following cost and revenue characteristics: Sales $ 520,000 Contribution margin ratio 70 % of sales Fixed expenses $ 312,000 The companys minimum required rate of return is 15%. Required: What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal places.)

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