Required information The Foundational 15 (Algo) [LO11-1, LO11-2] Skip to question [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 At the beginning of 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%. Foundational 11-5 (Algo) 5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)

Required information The Foundational 15 (Algo) [LO11-1, LO11-2] Skip to question [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 At the beginning of 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%. Foundational 11-5 (Algo) 5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.2.2P

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Required information

The Foundational 15 (Algo) [LO11-1, LO11-2]

Skip to question

[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

At the beginning of 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%.

Foundational 11-5 (Algo)

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

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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