Question
FIN343 Bank is considering the establishment of a new branch office at the corner of Crescent Street and Fitch Street. The savings association's economics department
FIN343 Bank is considering the establishment of a new branch office at the corner of Crescent Street and Fitch Street. The savings association's economics department projects annual operating revenues of $1.6 million from fee income generated by service sales and annual branch operating expenses of $800,000. The cost of procuring the property is $1.75 million and branch construction will total an estimated $2.75 million; the facility is expected to last 20 years. If the savings bank has a minimum acceptable rate of return on its invested capital of 14 percent, will FIN343 likely proceed with this branch office project?
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