Required information The Foundational 15 (Algo) [LO10-1, LO10-2] [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income. $ 1,200,000 320,000 880,000 640,000 $ 240,000 Average operating assets $ 600,000 At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 240,000 50 % of sales $ 84,000 The company's minimum required rate of return is 15%. Foundational 10-9 (Algo) 9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (D not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) ROI %

Required information The Foundational 15 (Algo) [LO10-1, LO10-2] [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income. $ 1,200,000 320,000 880,000 640,000 $ 240,000 Average operating assets $ 600,000 At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 240,000 50 % of sales $ 84,000 The company's minimum required rate of return is 15%. Foundational 10-9 (Algo) 9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (D not round intermediate calculations. Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) ROI %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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15 ces ! Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income. Average operating assets At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: $ 200,000 60 $ 90,000 The company's minimum required rate of return is 15%. Sales Margin $ 1,000,000 300,000 700,000 500,000 $ 200,000 $ 625,000 Contribution margin ratio Fixed expenses 4. What is the margin related to this year's investment opportunity? % of sales
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Required information The Foundational 15 (Static) [LO10-1, LO10-2] Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year’s operations: Sales $ 1,000,000 Variable expenses 300,000 Contribution margin 700,000 Fixed expenses 500,000 Net operating income $ 200,000 Average operating assets $ 625,000 At the beginning of 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%. Foundational 10-15 (Static) 15-a. Assume that the contribution margin ratio of the investment opportunity was 50% instead of 60%. If Westerville’s chief executive officer will earn a bonus only if her residual income from this year exceeds her residual income from last year, would she…
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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 11-7 (Algo) 7. 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))
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Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B $ 800,000 350,000 450,000 $ 350,000 250,000 Sales $ 450,000 Variable expenses Contribution margin 100,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A? Multiple Choice $(103,000) $(83,000) $(92,000) $(101,000)
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