Answered

Chiodini Incorporated has an $900,000 investment opportunity that involves sales of $2,430,000, fixed expenses of $1,044,900, and a contribution margin ratio of 50% of sales. The return on investment (ROI) for this year's investment opportunity considered alone is closest to:

Answer :

Parrain

Answer: 18.9%

Explanation:

Return on Investment = Net Income/ Average Investment

Net Income = Contribution Margin - Fixed Expenses

= (2,430,000 * 50%) - 1,044,900

= $170,100

Return on Investment therefore is;

= 170,100/900,000

= 18.9%

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