Beery Inc. reported the following results from last year's operations: Sales$11,400,000Variable expenses 8,180,000Contribution margin 3,220,000Fixed expenses 2,422,000Net operating income$ 798,000Average operating assets$6,000,000At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics: Sales$2,880,000 Contribution margin ratio 30% of salesFixed expenses$720,000 The company's minimum required rate of return is 12%. If the company pursues the investment opportunity, this year's combined residual income for the entire company will be closest to:
A. $24,300
B. $848,700
C. $114,000
D. $942,000
Answer: C
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