Robichau Inc. reported the following results from last year's operations: Sales$6,300,000Variable expenses 4,930,000Contribution margin 1,370,000Fixed expenses 803,000Net operating income$567,000Average operating assets$3,000,000?At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics: Sales$1,530,000 Contribution margin ratio 30% of salesFixed expenses$306,000 ?The company's minimum required rate of return is 20%.?If the company pursues the investment opportunity, this year's combined residual income for the entire company will be closest to:
A. $720,000
B. ($17,100)
C. ($60,000)
D. $776,100
Answer: C
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