Condren Inc At the Beginning of This Year, the Company Has a \begin{array}{lr}
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question 153

Multiple Choice

Condren Inc. reported the following results from last year's operations: $\begin{array}{lr}\text { Sales } & \$ 12,000,000 \\\text { Variable expenses } & 7,680,000 \\\text { Contribution margin } & 4,320,000 \\\text { Fixed expenses } & 3,720,000 \\\text { Net operating income } & \$ 600,000 \\\text { Average operating assets } & \$ 6,000,000 \\\end{array}$ At the beginning of this year, the company has a $1,000,000 investment opportunity with the following characteristics:
$\begin{array}{lc}\text { Sales } & \$ 1,100,000 \\\text { Contribution margin ratio } & 40 \% \text { of sales } \\\text { Fixed expenses } & \$ 363,000\end{array}$ If the company pursues the investment opportunity and otherwise performs the same as last year, the combined ROI for the entire company will be closest to:

• A) 1.1%
• B) 8.6%
• C) 9.7%
• D) 11.3%

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Definitions:

Hypothetical Thinking

The cognitive process involved in formulating and considering imaginary or "what if" scenarios, not restrained by current reality.

Deductive Reasoning

The practice of deriving a conclusion from the unification of multiple assertions believed to be true.

Trial-And-Error

A problem-solving method involving repeated, varied attempts which continue until success, or until the agent stops trying.

Invincibility Fable

A cognitive bias commonly found in teenagers and young adults, characterized by the belief that they are exempt from common vulnerabilities and dangers.