Prater Company made a $100,000 investment in new machinery. Assuming the company's margin is 4%, what income will be earned if the investment generates $300,000 in additional sales?
A) $40,000.
B) $12,000.
C) $200,000.
D) None of these.

Question

Quizplus · Accepted Answer

The income earned is calculated by multiplying the additional sales by the margin: $300,000 * 4% = $12,000.

Prater Company Made a $100,000 Investment in New Machinery