The following information applies to the questions displayed below Westerville C

Question

The following information applies to the questions displayed below Westerville Company reported the following results from last year's operations: Sales Varlable expenses Contribution margin Flxed expenses Net operating Income $ 1400,000 680,000 720,000 $280,000 Average operating assets $ 875,000 This year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: $480,000 Sales Contribution margin ratio Fixed expenses 80% of sales $336,000 The company's minimum required rate of return is 15%.

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Existing Investment Opportunity Total Sales $        1,400,000 $            480,000 $ 1,880,000 Less: Variable Cost $            680,000 $               96,000 $     776,000 Contribution Margin $            720,000 $            384,000 $ 1,104,000 Fixed expenses $            440,000 $            336,000 $     776,000 Net Operating Income $            280,000 $               48,000 $     328,000 Operating Assets $            875,000 $            300,000 $ 1,175,000

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