A growing chain is trying to decide which store location to open....
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?
Required 1
Required 2
the expected return on investment for each location.
Return on Investment Numerator / Denominator / = ROI
Location A Location B