Question
2 Part II n age The management of PaperPlus, a paperboard manufacturer, expects a return of 20% on investments. The company currently has total assets
2 Part II n age The management of PaperPlus, a paperboard manufacturer, expects a return of 20% on investments. The company currently has total assets of $10,000,000, earns a contribution margin of 60% on sales, has variable costs of $3,000,000 and reports profits of $2,000,000. The manager is considering acquiring another factory, which will increase sales by 40% and will maintain a 60% contribution margin on sales. Fixed costs for the new factory will be $1,000,000. What is the maximum amount of investment the company should make in the new factor in order to meet its ROI expectation? Select one: O a. $4,000,000 O b. None of the above OC. $2,800,000 O d. $15,000,000 Finish attempt... 1:05 AM
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