Wiswell Inc

question 117

Multiple Choice

Wiswell Inc.reported the following results from last year's operations:
The average operating assets were $8,000,000.
At the beginning of this year,the company has a $900,000 investment opportunity that would involve sales of $2,070,000,a contribution margin ratio of 30% of sales,and fixed expenses of $538,200.The company's minimum required rate of return is 10%.If the company pursues the investment opportunity,this year's combined residual income for the entire company will be closest to:

• A) $104,800
• B) $925,600
• C) ($19,800)
• D) $994,800

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Definitions:

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