1. Zest Soda, a local convenience store, sells soft drinks. It sells two large drinks for every small drink. A large drink sells for $1.70 with a variable cost of $0.40. A small drink sells for $1.10 with a variable cost of $0.30. What is the weighted average contribution margin? (Round your intermediate calculations and final answer to two decimal places.)

A. $1.70 per drink

B. $3.40 per drink

C. $1.13 per drink

D. $0.40 per drink

2. The P/E ratio approach to stock valuation is based on:

A) A constant yearly range of P/E ratios and an earnings forecast derived from historical growth patterns and market projections

B) The average yearly P/E ratio relative to the market, a yearly range of P/E ratios, and earnings based on an assumed constant growth rate

C) An increasing yearly range of P/E ratios and an earnings forecast based on the EPS of previous years

D) None of the above