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Minar Incorporated reported the following results from last years operations: Sales $ 5,700,000 Variable expenses 3,510,000 Contribution margin 2,190,000 Fixed expenses 1,734,000 Net operating income

Minar Incorporated reported the following results from last years operations:

Sales $ 5,700,000
Variable expenses 3,510,000
Contribution margin 2,190,000
Fixed expenses 1,734,000
Net operating income $ 456,000
Average operating assets $ 3,000,000

At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:

Sales $ 1,530,000
Contribution margin ratio 60 % of sales
Fixed expenses $ 810,900

If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to:

Multiple Choice

9.9%

1.9%

7.8%

6.3%

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