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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%
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