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$3,000,000At 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 and otherwise performs the same as last year, the combined ROI for the entire company will be closest to:
A. 14.5%
B. 18.5%
C. 3.9%
D. 24.0%
Answer: B
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Which of the following statements is true regarding cross subsidies?
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How many orders per year does the diner place if they order at the economic order quantityc
A) 18 B) 9 C) 5 D) 14
The Social Security system provides for reduced benefits at an early retirement age
Indicate whether the statement is true or false
Joe Ogden, the Chairman and CEO of Ogdenergy, Inc, a promising venture in the natural gas industry, is negotiating with Summer Street Capital Partners, a Buffalo, NY-based venture capital firm (VC), for funding of $15 mn
, which will be used for building PP&E. Summer Street is impressed with the venture, and is considering providing the funding in exchange for equity shares. However, Summer Street is concerned that if they demand an equity ownership percentage that is too high, Ogdenergy's entrepreneurs may be less inclined to work hard to ensure the venture's success. They determine that if they demand a 40% equity percentage, the firm will be worth $44 mn., but if they demand a 60% ownership percentage, the firm's value will be only $26 mn. Which equity ownership percentage should Summer Street take? (i.e., which maximizes Summer Street's NPV?) a. Summer Street should take a 40% equity percentage. b. Summer Street should take a 60% equity percentage.