An US Company reported the following results from last year
Subject: Business / Finance
Question
An US Company reported the following results from last year % 2013 operations:
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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 ratio 60 % of sales
Fixed expenses $ 90,000
The compan2019s minimum required rate of return is 15%.
Calculation should be with explanation.
1. What is last year's margin?
2. What is last year's turnover?
3. What is lat year's ROI?
4. What is the margin related to this year's investment opportunity? How did you get this answer?
5. What is the turnover related to this year's investment opportunity? How did you get this answer?
6. What is the ROI related to this year's investment opportunity? How did you get this answer?
