Canedo Inc At the Beginning of This Year, the Company Has a \begin{array}{lrr}
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question 67

Multiple Choice

Canedo Inc. reported the following results from last year's operations: $\begin{array}{lrr}\text { Sales } & \$ 9,600,000 \\\text { Variable expenses } & 7,170,000 \\\text { Contribution margin } & 2,430,000 \\\text { Fixed expenses } & 1,470,000 \\\text { Net operating income } & \$ 960,000 \\\text { Average operating assets } & \$ \quad 4,000,000\end{array}$ At the beginning of this year, the company has a $700,000 investment opportunity with the following characteristics:
$\begin{array}{lc}\text { Sales } & \$ 2,310,000 \\\text { Contribution margin ratio } & 60 \% \text { of sales } \\\text { Fixed expenses } & \$ 1,201,200\end{array}$ If the company pursues the investment opportunity and otherwise performs the same as last year, the combined turnover for the entire company will be closest to:

• A) 2.98
• B) 17.01
• C) 2.53
• D) 2.04

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Definitions:

McCulloch v. Maryland

A landmark Supreme Court case in 1819 that established the principles of federal supremacy and implied powers of the federal government.

Supremacy Clause

A provision in the U.S. Constitution stating that federal law takes precedence over state law.

Commerce Clause

A provision in the U.S. Constitution that grants Congress the power to regulate trade between states, with foreign nations, and with Native American tribes.

Concurrent Power

Powers in nations with a federal system of government that are shared by both the federal government and each constituent political unit.