Cirone Inc At the Beginning of This Year, the Company Has a \begin{array}{lrr}
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question 166

Multiple Choice

Cirone Inc. reported the following results from last year's operations: $\begin{array}{lrr}\text { Sales } & \$ 9,600,000 \\\text { Variable expenses } & 6,810,000 \\\text { Contribution margin } & 2,790,000 \\\text { Fixed expenses } & 1,926,000 \\\text { Net operating income } & \$ 864,000 \\\text { Average operating assets } & \$ 4,000,000\end{array}$ At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics:
$\begin{array}{lc}\text { Sales } & \$4,200,000 \\\text { Contribution margin ratio } & 30 \% \text { of sales } \\\text { Fixed expenses } & \$ 966,000\end{array}$ 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%

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