ACCT 241 Week 11 Assignment Help 4

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ACCT 241 Week 11 Assignment Help 4 | American University

american-university / ACCT 241
09 Aug 2019
Price: $15
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ACCT 241 Week 11 Assignment Help 4 | American University

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

Required:

1. What is last year’s margin?

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

What is last year’s turnover? (Round your answer to 1 decimal place.)

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

3. What is last year’s return on investment (ROI)?

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

4.	What is the margin related to this year’s investment opportunity?

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

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

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

6. What is the ROI related to this year’s investment opportunity?

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

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))

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

9. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%.))

10.

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

10-a. If Westerville’s chief executive officer will earn a bonus only if her ROI from this year exceeds her ROI from last year, would she pursue the investment opportunity?

10-b. Would the owners of the company want her to pursue the investment opportunity?

11.

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

11. What is last year’s residual income?

12.

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

12. What is the residual income of this year’s investment opportunity?

13.

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?

13.

If the company pursues the investment opportunity, this year’s residual income will be:


Average operating assets	$	1,600,000
Net operating income	$	432,000
Minimum required return		160,000
Residual income	$	272,000

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

14. 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 pursue the investment opportunity?

15.

Required information

[The following information applies to the questions displayed below.]

Westerville Company reported the following results from last year’s operations:


Sales	$	1,800,000
Variable expenses		740,000
Contribution margin		1,060,000
Fixed expenses		700,000
Net operating income	$	360,000
Average operating assets	$	1,200,000

At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics:


Sales	$	600,000
Contribution margin ratio		60	% of sales
Fixed expenses	$	288,000

The company’s minimum required rate of return is 10%.

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 pursue the investment opportunity?

15-b. Would the owners of the company want her to pursue the investment opportunity?

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