1? com/flow/connect. pter 11 Homework 0 Required information The following indor

Question

1? com/flow/connect. pter 11 Homework 0 Required information The following indormantion applies to the questions displayed below Westerville Company reported the following results from last year's operations Sales Variable expenses Contribution margin Fixed expenses Net operating income 380,800 $1,s80,000 500,00 1,000,8e9 00,000 Average operating $1,0, assets At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue Sales $380,e00 Contribution nargin ratio 60% of sales Fixed expenses 132,000 The company's minimum required rate of return is 10% 7 If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? Round your percentage enswer to 1 decimal plsce (i.e.1234 should be entered as 12.31) · ?Prev 78 15of15 ?Next > e.

Explanation / Answer

Net operating income of new investment=(300000*60%)-132000= $48000 7 Margin=Net operating income/Sales=(300000+48000)/(1500000+300000)= 19.3%

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