Question
Robichau Inc. reported the following results from last years operations: Sales $ 6,300,000 Variable expenses 4,930,000 Contribution margin 1,370,000 Fixed expenses 803,000 Net operating income
Robichau Inc. reported the following results from last years operations: Sales $ 6,300,000 Variable expenses 4,930,000 Contribution margin 1,370,000 Fixed expenses 803,000 Net operating income $ 567,000 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 30 % of sales Fixed expenses $ 306,000 The companys minimum required rate of return is 20%.
The residual income for this year's investment opportunity when considered alone is closest to:
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