Part C ONLY Marcus Tyler sells frozen custard and sandwiches It is considering a new site that will require a $2 million investment for land acquisition and construction costs The following operating results are expected Disregard income taxes Sales Revenue $980,000 Less operating expenses Food Supplies $320,000 Wages Salaries 180,000 Insurance Taxes 40,000 Utilities 10,000 Depreciation 70,000 620,000 Operating income $360 000 Required A If management requires a payback period of four years or less, should the new site be opened Why B Compute the accounting rate of return on the initial investment C What significant limitation of payback and the accounting rate of return is overcome by the net present value method

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Part C ONLY Marcus   Tyler sells frozen custard and sandwiches  It is considering a new site that will require a $2 million investment for land acquisition and construction costs  The following operating results are expected  Disregard income taxes  Sales Revenue $980,000 Less operating expenses  Food   Supplies $320,000 Wages   Salaries 180,000 Insurance   Taxes 40,000 Utilities 10,000 Depreciation 70,000 620,000 Operating income $360 000 Required  A  If management requires a payback period of four years or less, should the new site be opened  Why  B  Compute the accounting rate of return on the initial investment  C  What significant limitation of payback and the accounting rate of return is overcome by the net  present value method

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Part C ONLY Marcus & Tyler sells frozen custard and sandwiches. It is considering a new site that will require a $2 million investment for

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