Pankey Inc. has a $700,000 investment opportunity that would involve sales of $1,050,000, a contribution margin ratio of 40% of sales, and fixed expenses of $325,500. The company's minimum required rate of return is 18%. The residual income for this year's investment opportunity is closest to:
A. $0
B. $126,000
C. ($31,500)
D. $94,500
Answer: C
You might also like to view...
The clerk who opens the mail routinely steals remittances and checks. Describe a specific internal control procedure that would prevent or detect this fraud
What are the impacts of resource-constrained scheduling?
Fill in the blank(s) with the appropriate word(s).
What are the different terms used in electronic contracting?
What will be an ideal response?
Stephen is starting a new job and wants to demonstrate that he is a professional employee. What advice should he follow?
A) Never apologize for errors or misunderstandings because doing so calls attention to them. B) Show up a few minutes late every so often to show that he isn't an overzealous employee. C) Avoid compromising with others. D) Exercise self-control and keep personal opinions of people private.