Question: How will a company's contribution margin be affected by an investment in equipment that increases fixed costs in order to achieve a reduction in direct

How will a company's contribution margin be affected by an investment in equipment that increases fixed costs in order to achieve a reduction in direct labor cost?

Multiple Choice

Contribution margin will increase.

Contribution margin will either increase or decrease depending on the relative magnitudes of the changes in fixed and variable costs.

Contribution margin will remain the same.

Contribution margin will fall.

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