(Answered) Problem - westerville company reported the following

Accounting

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

Sales $2,300,000

Variable expenses 670,000

Contribution margin 1,630,000

Fixed expenses 1,170,000

Net operating income$ 460,000

Average operating assets$1,437,500

This year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics:

Sales $460,000

Contribution margin ratio 50 % of sales

Fixed expenses$161,000

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

QUESTION: If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year?

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