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A growing chain is trying to decide which store location to open. The first location (A) requires a $500,000 investment in average assets and is
A growing chain is trying to decide which store location to open. The first location (A) requires a $500,000 investment in average assets and is expected to yield annual income of $70,000. The second location (B) requires a $200,000 investment in average assets and is expected to yield annual income of $38,000 (1) Compute the expected retum on investment for each location. (2) Using retum on imvestment, which location (A or B) should the company open? Complete this question by entering your answers in the tabs below. Compute the expected retum on investment for each location. Megamart provides the following information on its two investment centers. Megamart provides the following information on its two investment centers. Megamart provides the following information on its two investment centers. Megamart provides the following information on its two investment centers. 1. Compute retum on investment for each centec Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11\% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Eiectronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target retum is 11%. Complete this question by entering your answers in the tabs below. Astume a target income of 11% of average assets, Compute residual income for each center. Which center generated the most residuai income? Complete this question by entering your answers in the tabs below. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income
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