Exercise 9-9 (Algo) Return on investment analysis LO A1

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 $75,000. The second location (B) requires a $200,000 investment in average assets and is expected to yield annual income of $40,000. (1) Compute the expected return on investment for each location. (2) Using return on investment, which location (A or B) should the company open?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

Compute the expected return on investment for each location.

Return on Investment
	Numerator	/	Denominator
		/		=	ROI
Location A
Location B