At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics: Sales $ 240,000 Contribution margin ratio 50 % of sales Fixed expenses $ 84,000 The company’s minimum required rate of return is 15%. 4. What is the margin related to this year’s investment opportunity?
At the beginning of this year, the company has a $150,000 investment opportunity with the following cost and revenue characteristics: Sales $ 240,000 Contribution margin ratio 50 % of sales Fixed expenses $ 84,000 The company’s minimum required rate of return is 15%. 4. What is the margin related to this year’s investment opportunity?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
Section: Chapter Questions
Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...
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Westerville Company reported the following results from last year’s operations:
| Sales | $ | 1,200,000 |
| Variable expenses | 320,000 | |
| Contribution margin | 880,000 | |
| Fixed expenses | 640,000 | |
| Net operating income | $ | 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 | $ | 240,000 | |
| Contribution margin ratio | 50 | % of sales | |
| Fixed expenses | $ | 84,000 | |
The company’s minimum required
4. What is the margin related to this year’s investment opportunity?
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