Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Robichau Incorporated 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 Incorporated 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%.

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

Multiple Choice

3.9%

24.0%

14.5%

18.5%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems Understanding Business Processes

Authors: Brett Considine, Alison Parkes, Karin Olesen, Michael Lee, Derek Speer

3rd Edition

1742165559, 978-1742165554

More Books

Students also viewed these Accounting questions

Question

3. Use mixed-ability groups in cooperative exercises.

Answered: 1 week ago

Question

find all matrices A (a) A = 13 (b) A + A = 213

Answered: 1 week ago

Question

=+2. What is the difference between brand voice and tone?

Answered: 1 week ago