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

11ea7998_5c86_32b6_911b_4168ff0e8a92_TB2627_00_TB2627_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%