What is the turnover related to this years investment

Assignment Help Financial Accounting

Reference no: EM131808087

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

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

Sales	$	1,400,000
Variable expenses		510,000

Contribution margin		890,000
Fixed expenses		610,000

Net operating income	$	280,000

Average operating assets	$	875,000

This year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics:

Sales	$	280,000
Contribution margin ratio		50	% of sales
Fixed expenses	$	98,000

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

1. What is the turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.)

Turnover;

2. 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 answer to 1 decimal place (i.e .1234 should be entered as 12.3))

Margin; %

3. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)

Turnover;

Reference no: EM131808087

Questions Cloud

Determine which hr job positions you would prefer : Determine which HR job positions you would prefer and explain why. How the selected company can establish HRM strategies to improve competitive advantages.

What is the estimate for variable costs and fixed costs : What is the estimate for variable costs, fixed costs, the cost formula, r, and r2 using Regression

What was the companys net income : What was the company's net income and What was the company's operating cash flow - determine which should be accepted, given a required rate of return of 10%

Compute the amount clydesdale should report as tax liability : Compute the amount Clydesdale should report as a deferred tax liability at December 31, 2012

What is the turnover related to this years investment : What is the turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.)

What are the pros and cons of decision : Why do you think it made this decision? What are the pros and cons of this decision? In your opinion, is it the correct decision?

Journal entries to record transactions for eduardo company : Prepare journal entries to record these selected transactions for Eduardo Company. Dec 31 Adjusted year-end accounts for accrued interest earned on the note

What is the difference between being a manager and leader : What is the difference between being a manager and being a leader? Why is this distinction important? Do all great leaders make great managers?

Determine the projected amount of income tax : Determine the projected amount of income tax expense that would be reported if Whitley purchases the equipment in 2013.

User Account

All Pages