You must prepare a return on investment analysis for the regional manager of Fas
ID: 2482155 • Letter: Y
Question
You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $40,000.
You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $40,000.
You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a 500,000 investment and is expected to yield annual net income of $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $40,000 Compute the return on investment for each Fast & Great Burgers alternative. Return on Investment RoI ROI Numerator I Denominator Location A Location B Using return on investment as your only criterion, recommend which of the locations to open. Location A Location BExplanation / Answer
Net Income / Investment
The first location (A)
ROI = $70,000 / $500,000
= 14%
The second location (B)
ROI = $40,000 / $200,000
= 20%
Using return on investment as your only criterion, recommend which of the location to open.
Location B
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