[The following information applies to the questions displayed below.] Westervill

Question

[The following information 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 Average operating assets937,500 1,500,000 730,000 770,000 470,000 $300,000 At the beginning of this year, the company has a $362,500 investment opportunity with the following cost and revenue characteristics: 580,000 Sales Contribution margin ratio Fixed expenses 70% of sales 319,000 The company's minimum required rate of return is 10%.

Explanation / Answer

2.What Last year’s turnover ?

= sales/average operating assets

= $15,00,000 / $9,37,500

= 1.6

5. What is the turnover related to this year’s investment opportunity?

= sales/average operating assets

= $5,80,000 / $3,62,500

= 1.6

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