Salvey Inc

question 129

Multiple Choice

Salvey Inc. reported the following results from last year's operations: The company's average operating assets were $3,000,000.
At the beginning of this year, the company has a $300,000 investment opportunity that involves sales of $480,000, fixed expenses of $100,800, 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 ROI for the entire company will be closest to:

• A) 16.6%
• B) 1.3%
• C) 18.2%
• D) 15.3%

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Definitions:

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