Tadman Inc At the Beginning of This Year, the Company Has a \begin{array}{lr}
\text

question 115

Multiple Choice

Tadman Inc. reported the following results from last year's operations: $\begin{array}{lr}\text { Sales } & \$, 400,000 \\\text { Variable expenses } & 5,120,000 \\\text { Contribution margin } & 3,280,000 \\\text { Fixed expenses } & 2,944,000 \\\text { Net operating income } & \$ \quad 336,000 \\\end{array}$ At the beginning of this year, the company has a $800,000 investment opportunity that involves sales of $2,800,000, fixed expenses of $756,000, 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 margin for the entire company will be closest to:

• A) 1.0%
• B) 3.0%
• C) 5.0%
• D) 3.8%

---

Definitions:

Reactants

Materials that exist at the beginning of a chemical reaction and are used up to produce end products.

Equilibrium Expression

A mathematical expression that relates the concentrations of the reactants and products at equilibrium in a reversible chemical reaction.

Reaction

A process in which one or more substances are changed into one or more different substances through the reorganization of atomic bonds.

Equilibrium Constant

A numerical value that represents the ratio of concentration of products to reactants at equilibrium in a reversible chemical reaction, under standard conditions.