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Westerville Company reported the following results from last years operations: Sales $ 1,500,000 Variable expenses...

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Accounting

Westerville Company reported the following results from last years operations: Sales $ 1,500,000 Variable expenses 690,000 Contribution margin 810,000 Fixed expenses 435,000 Net operating income $ 375,000 Average operating assets $ 1,250,000 At the beginning of this year, the company has a $350,000 investment opportunity with the following cost and revenue characteristics: Sales $ 420,000 Contribution margin ratio 70 % of sales Fixed expenses $ 252,000 The companys minimum required rate of return is 10%. 12. What is the residual income of this years investment opportunity?

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