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You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which
You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $80,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $44,000. Compute the return on investment for each Fast & Great Burgers alternative. Using return on investment as your only criterion, which location (A or B) should the company open? (The chain currently generates an 22% return on total assets.) Complete this question by entering your answers in the tabs below. Return on Investment Choice of Location Compute the return on investment for each Fast & Great Burgers alternative. Return on Investment Numerator Denominator = ROI Net income Average invested assets = ROI Location A S 80,000 $ 500,000 = 62% Location B $ 4,000 / $ 200,000 = 50% < Return on Investment Choice of Location >
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