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Calculate expected return on the investment for each company. Auto Wash Bot Ltd. (AWBL) has recently completed the research and development of a new touch

Calculate expected return on the investment for each company.

Auto Wash Bot Ltd. (AWBL) has recently completed the research and development of a new touch screen app for all mobile devices. This new technology is both more user friendly than the current technology on the market. Auto Wash Bot Ltd has just signed a major contract to provide the Auto Wash Bot terminal to a major producer of mobile devices. The founder of the business would like to sell a 50% interest in the business for $100,000 in order to finance further expansion of operations.

Popeyes Muscle Wash Ltd (PMWL) is a self-service, coin-operated car wash located in a busy residential area. The company provides all of the services of a typical car wash, including soap, wax, vacuuming as well as pressure washing. PMWL has been long established and enjoys the loyalty and repeat business of many local residents. The current owner is getting up in age and would like to sell 100% ownership interest in the business for $100,000 to pursue retirement. The current years income statement is consistent with prior years.

Auto Wash Bot Ltd.
Revenue $375,000
Cost of Goods Sold 86,250
Gross Profit 288,750
Other Expenses
Advertising 35,400
Office Expense 22,750
Research 195,000
Wages and Salaries 40,000
Total Other Expenses 293,150
Income Before Taxes (4,400)
Income Tax 0
Net Income $(4,400)

Popeyes Muscle Wash Ltd (PMWL) is a self-service, coin-operated car wash located in a busy residential area. The company provides all of the services of a typical car wash, including soap, wax, vacuuming as well as pressure washing. PMWL has been long established and enjoys the loyalty and repeat business of many local residents. The current owner is getting up in age and would like to sell 100% ownership interest in the business for $100,000 to pursue retirement. The current years income statement is consistent with prior years.

Popeyes Muscle Wash Ltd Income Statement For the Year Ended December 31, 2015
Revenue $375,000
Cost of Goods Sold 163,125
Gross Profit 211,875
Other Expenses
Advertising 5,200
Office Expense 17,400
Repairs and Maintenance 85,000
Wages and Salaries 50,000
Total Other Expenses 157,600
Income Before Taxes 54,275
Income Tax 8,413
Net Income $45,862

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