Asked by Joseph Hasson on May 22, 2024
Verified
Cirone Inc.reported the following results from last year's operations: At the beginning of this year, the company has a $1,200,000 investment opportunity with the following characteristics: If the company pursues the investment opportunity and otherwise performs the same as last year, the combined margin for the entire company will be closest to:
A) 3.1%
B) 8.4%
C) 6.3%
D) 12.1%
Combined Margin
A metric that combines multiple types of profit margins (such as gross, operating, or net margin) to assess overall performance.
- Assess the consequences of investment choices on a firm’s financial metrics.
Verified Answer
AC
arlene calcenaMay 27, 2024
Final Answer :
B
Explanation :
Net operating income = $864,000 + $294,000 = $1,158,000
Sales = $9,600,000 + $4,200,000 = $13,800,000
Margin = Net operating income ÷ Sales = $1,158,000 ÷ $13,800,000 = 8.4%
Sales = $9,600,000 + $4,200,000 = $13,800,000
Margin = Net operating income ÷ Sales = $1,158,000 ÷ $13,800,000 = 8.4%
Learning Objectives
- Assess the consequences of investment choices on a firm’s financial metrics.
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