Parsa Inc. reported the following results from last year's operations: Sales$14,000,000Variable expenses 9,500,000Contribution margin 4,500,000Fixed expenses 3,800,000Net operating income$ 700,000Average operating assets$7,000,000At the beginning of this year, the company has a $1,100,000 investment opportunity with the following characteristics: Sales$1,980,000 Contribution margin ratio 40% of salesFixed expenses$653,400 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. 10.4%
B. 1.7%
C. 12.0%
D. 8.6%
Answer: A
You might also like to view...
All SEC-registered firms must issue either an income statement or a statement of cash flows, but not both
Indicate whether the statement is true or false
High contact services are likely to:
a. Be as hard or easy to manage as low contact services b. Be harder to manage than low contact services c. Be easier to manage than low contact services d. Require no management
The strength of using ______ is that the HR staff and developers can focus specifically on business processes, policies, and procedures instead of on technology, leading to stronger solutions.
a. gap analysis b. the needs analysis c. the physical model d. the logical model
Which of the following interest-free loans is subject to the imputed interest rules (i.e., interest must be imputed on the loan)? I.Benito loans $250,000 to his son. His son uses the money to open a new business. During the current year, the business shows a loss and his son has no other sources of income.II.Bisbane Corporation loans $8,000 to its principal shareholder. The shareholder uses the funds to buy additional shares of stock in Arcane. The shareholder is deemed to receive $4,000 of dividends from Brisbane during the year.?
A. Only loan I B. Only loan II C. Both loans D. None of the two loans