Westerville Company reported the following results from last years operations:

Sales	$	1,400,000
Variable expenses		680,000
Contribution margin		720,000
Fixed expenses		440,000
Net operating income	$	280,000
Average operating assets	$	875,000

This year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics:

Sales	$	480,000
Contribution margin ratio		80	% of sales
Fixed expenses	$	336,000
Foundational 11-5 5. What is the turnover related to this years investment opportunity? (Round your answer to 1 decimal place.) Foundational 11-6 6. What is the ROI related to this years investment opportunity? Foundational 11-7 7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e .1234 should be entered as 12.3)) Foundational 11-8 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.) Foundational 11-9 9. 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., 0.1234 should be considered as 12.3%.)) Foundational 11-10 10-a. If Westervilles chief executive officer will earn a bonus only if her ROI from this year exceeds her ROI from last year, would she pursue the investment opportunity? Yes No 10-b. Would the owners of the company want her to pursue the investment opportunity? Yes No Foundational 11-11 11. What is last years residual income? Foundational 11-12 12. What is the residual income of this years investment opportunity? Foundational 11-13 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year? Foundational 11-14 14. If Westervilles chief executive officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she pursue the investment opportunity? No Yes Foundational 11-15 15-a. Assume that the contribution margin ratio of the investment opportunity was 75% instead of 80%. If Westervilles Chief Executive Officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she pursue the investment opportunity? No Yes 15-b. Would the owners of the company want her to pursue the investment opportunity? Yes No