Baldwin Company's product Best has Fixed Costs of $12,000, sales of 10,000 units, selling price per unit of $30, and a contribution margin ratio of 40%. Baldwin is considering investing in a Marketing program that costs $20,000 and is projected to increase sales volume by 10%. All else constant, if Baldwin makes this decision based on a minimum acceptable ROI in the first year of 50% for the project, should they invest in this marketing program?
a. Yes, because a contribution margin ratio of 40% and a 10% increase in sales volume guarantees a return of at least 50% for any project
b. Yes, because the investment will increase Baldwin's Contribution Margin by $12,000 and their Fixed Costs by $20,000 resulting in a 60% ROI for this investment in the first year
c. No, because a $20,000 investment would require at least a 20% increase in sales volume, regardless of the contribution margin ratio
d. None of the above