Compute the after$-$tax operating income for each of the existing $15$ schools.

Explanation:

The after$-$tax operating income is already provided for each school. For example, VA$4$ has an after$-$tax operating income of $$184,230.$

Step $2$

Compute the return on investment $($ROI$)$ for each of the existing $15$ schools using the formula: ROI $=($After$-$Tax Operating Income $/$ Total Investment$)*100.$

Explanation:

For VA$4,$ ROI $=($

$801,000)*100=22\mathrm{.}99\%.$

Step $3$

Identify the worst$-$performing school based on after$-$tax operating income and ROI.

Explanation:

The worst$-$performing school based on after$-$tax operating income is VA$5$ with $-$$$23,700.$ Based on ROI, the worst$-$performing school is also VA$5$ with $-3\mathrm{.}00\%.$

Step $4$

Compute the ROI for each of the three new schools using the same formula.

Explanation:

For NVA$1,$ ROI $=($

$880,000)*100=15\mathrm{.}00\%.$

Step $5$

Compare the after$-$tax operating income and ROI of the new schools with the existing schools to determine which new schools to recommend opening.

Explanation:

NVA$1$ has an ROI of $15\mathrm{.}00\%,$ which is higher than the ROI of the worst$-$performing existing schools. Therefore, it is a good candidate for opening.

Step $6$

Summarize the recommendations based on the evaluations.

Explanation:

Based on after$-$tax operating income, recommend closing VA$5$ and opening NVA$1.$ Based on ROI, also recommend closing VA$5$ and opening NVA$1.$

Answer

Close VA$5$ and open NVA$1$ based on both after$-$tax operating income and ROI.