Westerville Company reported the following results from last years operations: ...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Westerville Company reported the following results from last years operations:
| Sales | $ | 1,500,000 |
| Variable expenses | 500,000 | |
| Contribution margin | 1,000,000 | |
| Fixed expenses | 700,000 | |
| Net operating income | $ | 300,000 |
| Average operating assets | $ | 1,000,000 |
| This year the company has a $200,000 investment opportunity with the following cost and revenue characteristics: |
| Sales | $ | 300,000 | |
| Contribution margin ratio | 60 | % of sales | |
| Fixed expenses | $ | 132,000 | |
| The companys minimum required rate of return is 10%. |
| Required: |
If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your answer to 1 decimal place.)
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.