Consider a company that produces chemicals. The manager estimates that if the company spends an additional $250,000 on advertising, they can increase sales revenues by $1,500,000. They also calculate their contribution margin ratio at 42.86% (or 0.4286). Should the company invest in more advertising in order to increase their sales? By how much will their operating income increase if they make the investment?

Group of answer choices

They should make the investment in advertising because they'll generate an additional $392,900 in operating income.

They should make the investment in advertising because they'll generate an additional $1,500,000 in operating income.

They should not make the investment in advertising because it will cost them an additional $250,000 in extra cost with no immediate benefit.

They should not make the investment in advertising because it will only generate an additional $107,150 in operating income.