What is last year’s margin? What is last year’s turnover? What is last year’s re
ID: 2467019 • Letter: W
Question
What is last year’s margin?
What is last year’s turnover?
What is last year’s return on investment (ROI)?
What is the margin related to this year’s investment opportunity?
What is the turnover related to this year’s investment opportunity?
What is last year’s margin?
What is last year’s turnover?
What is last year’s return on investment (ROI)?
What is the margin related to this year’s investment opportunity?
What is the turnover related to this year’s investment opportunity?
The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations Sales Variable expenses $1,500,000 730,000 Contribution margin Fixed expenses 770,000 470,000 Net operating $ 300,000 income Average operating s 937,500 assets This year, the company has a $362,500 investment opportunity with the following cost and revenue characteristics $580,000 Sales Contribution %of sales 70% margin ratio Fixed expenses $ 319,000 The company's minimum required rate of return is 10%Explanation / Answer
What is last year’s margin? The Answer is $ 300,000
What is last year’s turnover? The Answer is $ 1,500,000
What is last year’s return on investment (ROI)? = (300000/937500) The Answer is 32%
What is the margin related to this year’s investment opportunity? The Answer is 24%
Working Notes: Sales = 580,000 and contribution margin = 70% of 580,000 = $ 406,000, Fixed Cost = $ 319,000
Therefore, Net Income = 406000 - 319000 = $ 87,000
Investment = $ 362,500
Therefore, Margin related to this investment oppourtunity = 87000/362500 = 24%
What is the turnover related to this year’s investment opportunity? The Answer is $ 580,000
What is the turnover related to this year’s investment opportunity? The Answer is $ 580,000
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