Forrester Company is considering buying new equipment that would increase monthly fixed costs from $270,000 to $300,000 and would decrease the current variable costs of $70 by $10 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $550,000 and current break-even units are 8,100. If Forrester purchases this new equipment, the revised contribution margin ratio would be:

Multiple Choice

a.) 30%.

b.) 40%.

c.) 10%.

d.) 70%.

e.) 60%.