Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $1,200,000 At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 360,000 70 of sales $ 216,000 The company's minimum required rate of return is 10%. 6. What is the ROI related to this year's investment opportunity?

Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $1,200,000 At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 360,000 70 of sales $ 216,000 The company's minimum required rate of return is 10%. 6. What is the ROI related to this year's investment opportunity?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.5.3P

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