rcise 9-9 Investment center analysis LO A1 You must prepare a return on investme

Question

rcise 9-9 Investment center analysis LO A1 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 $500000 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 $42,000 Compute the return on investment for eoch Fast & Great Burgers alternative Return on investment ROI Denominator Numerator1 ROI Location A Location B

Explanation / Answer

Calculate ROI :

Choose numerator / Choose denominator = ROI Net income / Investment = ROI Location A 70000 / 500000 = 14% Location B 42000 / 200000 = 21%

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