Question

You must prepare a return on investment analysis for the regional manager of Fast & Great...

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 $85,000. 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.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
  • ROI for both the alternatives are calculated below:

Alternative 1

Alternative 2

Working

Location A

Location B

A

Expected Annual Net Income

$           85,000.00

$          40,000.00

B

Investments

$         500,000.00

$        200,000.00

C = (A/B) x 100

Return on Investments

17.00%

20.00%

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI).
Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year:Sales$730,000Net operating income$13,140Average operating assets$100,000Required:1. Compute the Springfield club’s return on investment (ROI).(Round your answers to 2 decimal places.)Margin1.80%Turnover7.30timesROI13.14%2. Assume that the manager of the club is able to increase sales by $73,000 and that, as a result,...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $55,000 $173,000 $116,000 $277,000 2 55,000 173,000 88,000 234,000 3 55,000 173,000 44,000 164,000 4 55,000 173,000 19,000 112,000 5 55,000 173,000...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $55,000 $178,000 $116,000 $285,000 2 55,000 178,000 88,000 240,000 3 55,000 178,000 44,000 169,000 4 55,000 178,000 19,000 116,000 5 55,000 178,000...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Nature’s Portrait Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Front-End Loader Greenhouse Fixtures Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $25,000 $ 40,000 $11,250 $ 26,250 2   20,000    35,000   11,250    26,250 3   7,000    22,000   11,250    26,250 4   3,000    18,000   11,250    26,250 5...
Access Part II of the IG009 Assessment Scenarios document. As the new product development manager, you...
Access Part II of the IG009 Assessment Scenarios document. As the new product development manager, you are considering investment proposals for two mutually exclusive investment opportunities. The two proposals must be evaluated using net present value (NPV), accounting rate of return (ARR), internal rate of return (IRR), and payback. Review the cash flow information in the “Investments” section of the Assessment Scenarios document, and then analyze the investment proposals using Excel or another spreadsheet software to calculate NPV, ARR, IRR,...
Question 3 – Capital Investment Analysis The management team of Accent Group Limited have received a...
Question 3 – Capital Investment Analysis The management team of Accent Group Limited have received a proposal from the manager of Hype DC. This proposal concerns a major upgrade to Hype DC's stores to improve the customer experience. Key details relating to this proposal include: The initial cost will be $22 million. This cost will be depreciated using the straight line method over the 5 year life of the upgrade. During year 1, the firm will increase marketing costs by...
HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing...
HomeGrown Company is a chain of grocery stores that are similar to indoor farmer's markets, providing fresh, local produce, meats, and dairy products to consumers in urban areas. HomeGrown is considering opening several stores in a new city, and has proposals from three contractors (Alpha, Beta, and Gamma companies) who would like to provide buildings for the new stores. The amount of expected revenue from the stores will depend on the design of the contractor. For example, if HomeGrown decides...
Tax Return Problem –?Decision Making Alice J. and Bruce M. Byrd are married taxpayers who file...
Tax Return Problem –?Decision Making Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice's birthday is September 21, 1969, and Bruce's is June 27, 1968. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and...
1. You have been hired by the Board of Directors of firm XYZ as a part...
1. You have been hired by the Board of Directors of firm XYZ as a part of a team, tasked with the valuation of a potential acquisition target. You have collected the following publicly available information about the target company: • The common stock of the company is currently selling for an average of $40 per share. There are 6.5 million shares outstanding. The annual dividend that the company just paid was $2.60 per share. • The company has two...
Note: This problem is for the 2018 tax year. Alice J. and Bruce M. Byrd are...
Note: This problem is for the 2018 tax year. Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice's birthday is September 21, 1971, and Bruce's is June 27, 1970. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT