Assume that fast-food restaurants generally provide an ROI of 15%, but that such a restaurant near a college campus has an ROI of 18% because its relatively large volume of business generates an above-average turnover (sales/assets). The replacement value of the restaurants plant and equipment is $206,000.

If you were to invest that amount in a restaurant elsewhere in town, you could expect a 15% ROI. Required: a-1. Would you be willing to pay more than $206,000 for the restaurant near the campus? multiple choice Yes No

a-2. What is the maximum price you would be willing to pay for the business? (Do not round intermediate calculations.)

b. If you purchased the restaurant near the campus for $247,200 and the fair value of the assets you acquired was $206,000, identify the account along with its balance, that is used to record the additional amount paid over the fair value of the assets.