Salvey Incorporated reported the following results from last year's operations: 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 return on investment (ROI) for the entire company will be closest to:
A) 16.6%
B) 1.3%
C) 18.2%
D) 15.3%

Question

Salvey Incorporated reported the following results from last year's operations:  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 return on investment (ROI) for the entire company will be closest to:
A) 16.6% 
B) 1.3% 
C) 18.2% 
D) 15.3%

Quizplus · Accepted Answer

The Answer of Salvey Incorporated reported the following results from last year's operations:  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 return on investment (ROI) for the entire company will be closest to:
A) 16.6% 
B) 1.3% 
C) 18.2% 
D) 15.3%

Salvey Incorporated Reported the Following Results from Last Year's Operations