Final answer:
The company's net operating income would increase by $64,125 if Minneapolis increased its sales by $85,500 per year.
Step-by-step explanation:
To calculate the increase in net operating income, we need to determine the change in sales and the operating income ratio.
Step 1: Calculate the operating income ratio for the current year:
Operating income ratio = Operating income / Sales
Operating income ratio = $15 million / $20 million = 0.75
Step 2: Calculate the change in operating income:
Change in operating income = Change in sales × Operating income ratio
Change in operating income = $85,500 × 0.75 = $64,125
Therefore, the company's net operating income would increase by $64,125 if Minneapolis increased its sales by $85,500 per year.