A company is evaluating a $250,000 investment opportunity with the following financial data: Sales: $420,000 Contribution Margin Ratio: 65% Fixed Expenses: $189,000 Calculate the margin for this investment opportunity.

A company is evaluating a $250,000 investment opportunity with the following financial data: Sales: $420,000 Contribution Margin Ratio: 65% Fixed Expenses: $189,000 Calculate the margin for this investment opportunity.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...

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A company is evaluating a $250,000 investment opportunity
with the following financial data: Sales: $420,000
Contribution Margin Ratio: 65% Fixed Expenses: $189,000
Calculate the margin for this investment opportunity.

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Golden Goodness (GG) has an investment center that had the following data: Operating Income $28,000 Sales $350,000 Invested assets $175,000 PMB has set a minimum acceptable rate of return at 14%. Using the information, answer the following questions. You must include what type of number it is (%, $, etc.) Part A: What is the profit margin? Part B: What is the investment turnover? Part C: What is the return on investment? Part D: What is the residual income? Part E: Explain each of the calculations you just performed (a-d).
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