one more question please. Westerville Company reported the following results fro
ID: 2575742 • Letter: O
Question
one more question please.
Westerville Company reported the following results from last year's operations Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets 1,437,500 2,300,000 670,000 1,630,000 1,170,000 460,000 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics 460,000 Sales Contribution margin ratio Fixed expenses 50% of sales 161,000 The company's minimum required rate of return is 15%Explanation / Answer
Total sales = (2300000+460000) = 2760000
Total assets = (1437500+287500)= 1725000
Total net income = (460000+69000) = 529000
8) Turnover = Total sales/Total assets
= 2760000/1725000
Turnover = 1.60
9) ROI = net income*100/Total assets
= 529000*100/1725000
ROI = 30.7%
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