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21 November, 07:05

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 $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $44,000.

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  1. 21 November, 07:16
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    14% and 22%

    Explanation:

    The formula to compute the return on investment is shown below:

    Return on investment = Net income : Investment

    The preparation of the return on investment analysis is shown below:

    Fast & Great Burgers

    Return on investment analysis

    Numerator : Denominator = Return on investment

    Location A $70,000 : $500,000 = 14%

    Location B $44,000 : $200,000 = 22%
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