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What is the margin related to years investment opportunity

Assignment Help Managerial Accounting
Reference no: EM132507750

Westerville Company reported the following results from last year's operations:

Sales$1,000,000

Variable expenses 300,000

Contribution margin 700,000

Fixed expenses 500,000

Net operating income$ 200,000

Average operating assets$625,000

This year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics:

Sales$200,000

Contribution margin ratio 60 % of sales Fixed expenses$90,000

The company's minimum required rate of return is 15%.

Question 1: What is the margin related to this year's investment opportunity?

Reference no: EM132507750

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