Question $10(2$ points$)$

For the last year, Herlo Inc. has been selling its special starter Surfer Kit for $$500\mathrm{.}00,$

providing the store with a $40\%$ contribution margin. This month, Herlo Inc. decided

to have a special sales event. During this special sales

event, Herlo will be selling the Surfer Kit for $$400\mathrm{.}00.$ Assuming that their variable

costs remain the same, what is Herlo's contribution margin $(\%)$ during the special

sales event?

$35\%$

$40\%$

$50\%$

$25\%$