Othman Inc. has a $800,000 investment opportunity with the following characteristics: $\begin{array}{lc}
\text { Sales } & \$ 2,240,000 \
\text { Contribution margin ratio } & 50 \% \text { of sales } \
\text { Fixed expenses } & \$ 1,008,000
\end{array}$ The margin for this investment opportunity is closest to:

Question

Quizplus · Accepted Answer

The margin is calculated as (Contribution Margin - Fixed Expenses) / Sales. Contribution Margin = 50% of $2,240,000 = $1,120,000. Profit = $1,120,000 - $1,008,000 = $112,000. Margin = $112,000 / $2,240,000 = 5.0%.

Othman Inc The Margin for This Investment Opportunity Is Closest To: A)

Othman Inc The Margin for This Investment Opportunity Is Closest To:
A)