Silver Incorporated reported the following results from last year’s operations: Sales $ 7,200,000 Variable expenses 5,550,000 Contribution margin 1,650,000 Fixed expenses 1,146,000 Net operating income $ 504,000 The company’s average operating assets were $3,000,000. At the beginning of this year, the company has a $300,000 investment opportunity that involves sales of $480,000, fixed expenses of $100,800, and a contribution margin ratio of 30% of sales. 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:
Silver Incorporated reported the following results from last year’s operations: Sales $ 7,200,000 Variable expenses 5,550,000 Contribution margin 1,650,000 Fixed expenses 1,146,000 Net operating income $ 504,000 The company’s average operating assets were $3,000,000. At the beginning of this year, the company has a $300,000 investment opportunity that involves sales of $480,000, fixed expenses of $100,800, and a contribution margin ratio of 30% of sales. 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:
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
Section: Chapter Questions
Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...
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Silver Incorporated reported the following results from last year’s operations:
| Sales | $ 7,200,000 |
|---|---|
| Variable expenses | 5,550,000 |
| Contribution margin | 1,650,000 |
| Fixed expenses | 1,146,000 |
| Net operating income | $ 504,000 |
The company’s average operating assets were $3,000,000.
At the beginning of this year, the company has a $300,000 investment opportunity that involves sales of $480,000, fixed expenses of $100,800, and a contribution margin ratio of 30% of sales.
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:
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