Cirone Inc.reported the following results from last year's operations:
At the beginning of this year,the company has a $1,200,000 investment opportunity with the following characteristics:
If the company pursues the investment opportunity and otherwise performs the same as last year,the combined margin for the entire company will be closest to:
A) 3.1%
B) 8.4%
C) 6.3%
D) 12.1%

Question

Cirone Inc.reported the following results from last year's operations:
 At the beginning of this year,the company has a $1,200,000 investment opportunity with the following characteristics:
 If the company pursues the investment opportunity and otherwise performs the same as last year,the combined margin for the entire company will be closest to:
A) 3.1% 
B) 8.4% 
C) 6.3% 
D) 12.1%

Quizplus · Accepted Answer

11ea7761_165f_9f9e_81a5_b33a92839ae0_TB2580_00 Net operating income = $864,000 + $294,000 = $1,158,000
Sales = $9,600,000 + $4,200,000 = $13,800,000
Margin = Net operating income ÷ Sales = $1,158,000 ÷ $13,800,000 = 8.4%