Westerville company_roi analysis | Accounting homework help

 

Westerville Company reported the following results from last years 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

This year the company has a $120,000 investment opportunity with the following cost and revenue characteristics:

Sales $200,000

Contribution Margin Ration 60% of sales

Fixed Expenses $90,000

The company’s minimum required rate of return is 15%

1.      What is last year’s margin?

2.      What is last year’s turnover? Round answer to one decimal place

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

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

5.      What is the turnover related to this year’s investment opportunity? (Round to 2 decimal Places)

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

7.      If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round to one Decimal Place)

8.      If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Two Decimal Places)

9.      If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year? (One Decimal Place) (%)

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?

B. Would the owners of the company want her to pursue the investment opportunity?

11. What is last year’s residual income?

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

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

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. 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?

 

 

B. Would the owners of the company want her to pursue the investment opportunity?

 

 

 

 

 

 

Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Try it now!

Get 20% Discount on This Paper

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Academic Solvers has put together a group of highly qualified writers with a wide range of expertise in the online writing community. Our goal is to become your one-stop shop for all academic and online writing needs. Take a look at our fantastic service below!

Editing

Research Paper Editing

At Academic SolversEditing your research paper could prove to be difficult especially amidst the tight schedules that students have. At academicsolvers.net, we offer research paper editing services. The services include proofreading and use of online platforms such as Grammarly and Turnitin to address any concerns that may arise within the paper. Get our services and you will have satisfactory results.

Research Paper

Custom Research Paper

Writing a research paper could be quite hectic especially if it is your first time. Identifying the research topic, finding the references and interpreting information could pose significant challenges. However, this should not be issues of concern anymore. At academicsolvers.net, we offer solutions to research papers. We deliver plagiarism free and quality research papers that are customized to suit your needs.

Editing

Online Proofreading

Despite writing expertise and skills, you are never guaranteed of error free papers. Academic solvers’ online proofreading services leaves no mistake unaddressed. We go through your paper using a variety of online tools that help to ensure that we edit your paper and make it error free. We have collected a group of experts hence can guarantee quality proofreading services.

Coursework

Cheap Research Papers

Do you have difficulties writing your research paper? Are you afraid of the cost of hiring a professional to write your research papers? Worry no more. At academicsolvers.net we address both of your problems. We are equipped with a large number of professional writers. Second, we offer our research paper writing services at cheap prices that are largely affordable. Don’t miss this chance. Order our cheap research papers today.

Coursework

College Assignment

College assignment could be one of the biggest challenges to students especially working with tight schedules. Academicsolvers.net acts to bridge this gap existing between getting satisfactory grades and meeting deadlines. Our college assignment professionals provide students with quality, plagiarism free and confidential assignment help that helps them to achieve desired grades and outcomes.

Coursework

Essay Help

Essays are some of the most critical elements in the academic life of a student. At academic solvers we prioritize providing quality essays. As such, our professional ensure that they address issues of grammar, structure and plagiarism to provide essays that meet the need of the client. Here, we focus on developing content that aims at addressing the subject in question through the expertise of our professional and experienced writers. Try our services and we guarantee succes.